Departments are at different stages and have different approaches to understanding their sectors’ supply chain dependencies and exposure.13 The Treasury told us that individual departments lead on their sectors and it is for each of them to monitor the health of their sectors.14 It explained how information that a particular sector or company is in distress is shared through “the informal network of interaction between relevant teams” or through the Treasury spending teams if the department was seeking to prepare a financial contribution to support the company. The Treasury explained that it also monitored various indicators of health and resilience of the corporate sector as a whole. Although the Insolvency Service statistics indicate an increase in insolvencies in absolute terms, it told us that the number of businesses had also increased.15 We asked the Treasury about how it measures the number of businesses and ensures that these are trading businesses, as we were concerned that the figures may be misleading if they include new companies being created that do not exist or have no intention of carrying out any activity.16 The Treasury wrote to us after the evidence session and confirmed that “there is a risk these figures include some inactive firms.” However, it said it was reassured by the fact new legislation 8 C&AG’s Report, paras 2.2–2.4 9 Q41 10 Department for Business and Trade, Critical Imports and Supply Chains Strategy, 17 January 2024 11 Q43 12 Q48 13 C&AG’s Report, para 2.17 14 Q41 15 Qq33–34 16 Q40 Monitoring and responding to companies in distress 11 when introduced would improve the accuracy and quality of data on Companies House registers, that it could still make judgements on the overall trend by comparing numbers over time, and that it also used other metrics to analyse the corporate sector.17