Should we expect an increasing number of companies to fail in the year ahead?

Tony Supperstone: Generally speaking, the economy is bumping along. We're certainly not going to see the recession of the early 1990s again. Personal insolvency is rising and will continue to rise, the problem is that there is so much credit available. On the corporate side I don't think the numbers are going to increase particularly as there will be certain sectors that have problems and certain regions that have problems, but I don't see any spectacular rises forthcoming.

Mark Palios: The biggest issue is the extent of the liquidity that's around. There is a great feeling that this is a bubble waiting to burst.

Which sectors are the worst affected?

Tony Supperstone: In retail, there have been a lot of high-profile failures. With the increase in the number of administrations, which are seen as a rescue tool, retail is always going to be a good opportunity for an administration. This is because you can restructure a retail group leaving behind the unprofitable shops and coming out with a nice clean operation. We get a lot of manufacturing businesses in trouble and with the impact of MG Rover that has been highlighted. As a country we don't manufacture as much as we used to so retail is the biggest side.

Can debts to HMRC be negotiated down or is the taxman immoveable on tax liabilities owed?

Tony Supperstone: R3 members spend a lot of their time advising companies on debts due to HMRC and it is possible to negotiate. One has to be totally upfront, totally honest. They will listen to sensible proposals, they don't want to shut down businesses for the sake of it, they want to get their money back like everyone else and they are becoming more commercial these days.

Are more companies turning to turnaround specialists before a problem becomes fatal?

Mark Palios: It is not so much coming from the company itself. You normally find an agent for change being a funder, lender or an adviser. I think within that community it is more accepted. There is a culture now which accepts the fact that an intervention into the management can happen. There were some statistics done in the late 1980s that 25% of companies in any point of their lives require a turnaround.

Why can't the company executives manage the process instead of having to call in specialist?

Tony Supperstone: Because they are too close to it. They are the ones who have the problem, they can't see the wood for the trees, they need someone whose sole business is tuning around companies.

Are pension problems persuading more companies to call on specialist turnaround help?

Tony Supperstone: We have seen a few instances recently. Companies that were previously not balance sheet insolvent, if you take into account the deficit of a pension scheme, are now insolvent. And if they are not able to make up that deficit then there is a danger that they will go into some sort of administration or insolvency process. It's not a phenomenon we have seen before.

Are parts of the NHS in need of turnaround advice?

Mark Palios: There is a lot of work to be done – obviously because it is a major industry employing a lot of people with a lot of GDP being spent in this area. There is an impression at the moment that a lot of the work that the guys in the NHS are doing is trying to make it hit budget. What the government has actually done is employ accountants to make people hit budget which you can do. You reduce costs, but you also probably reduce your service levels. The real win for the government is in getting to a position whereby you improve performance. You can cut costs and you see redundancies and you can hit budget but that is not the issue, the issue is improving performance.

Do insolvency specialists charge too much?

Tony Supperstone: Generally, I don't think so. Insolvency practitioners fees are agreed by creditors. There is vast transparency now, we give details of all our time spent to the creditors. R3 members are specialist in their business and it is not something every Tom, Dick and Harry can do. You have to have a licence to act as an insolvency practitioner.

This week's experts

Tony Supperstone takes over as President of R3, the Association of Business Recovery Professionals, later this month. He is a former business recovery partner at BDO Stoy Hayward in Birmingham and now a consultant.

Former Football Association chief executive Mark Palios is one of the best known turnaround specialists around. Now a senior managing director with FTI Palladium Partners, he has more than 20 years of experience in rebuilding value for stakeholders of troubled businesses, acting as a principal and as a business adviser.

Chaired by Damian Wild, group editor in chief of Accountancy Age and Financial Director