Government response
1. The Government welcomes the interest that
the Business, Innovation and Skills Committee has shown in the
work of the Insolvency Service.
2. The Committee is reporting on the Insolvency
Service at a time of considerable change.
3. This is primarily driven by substantial changes
in demand for its Official Receiver services over recent years.
By contrast, demand for the agency's investigation and enforcement
services, and volumes of redundancy payments have kept relatively
stable.
4. Over the past decade, the annual volume of
insolvency cases handled by the agency more than doubled to reach
a peak of almost 80,000 cases in 2009-10. Resourcing capacity
in the agency was stepped up to meet this demand. Case numbers
have since declined just as sharply and are now below 35,000 cases:
a drop of over 50% in 3 years.
5. Much has already been done to deal with the
resulting overcapacity. Annual operating costs are £63.8m
a year (34%) less than in 2009-10, and employee numbers have been
reduced by a third, from around 3000 to 2000. There remain other
significant legacy issues, for example surplus office space. These
are being tackled.
6. The Government welcomes the Committee's recognition
that high levels of public service have been maintained by the
Insolvency Service throughout this difficult period. Insolvents
express high levels of satisfaction in the service they receive.
Stakeholder confidence in the enforcement regime has been sustained.
Continuous improvement to UK insolvency frameworks keeps our regime
amongst the best in the world, consistently ranked in the World
Bank's Top 10.
7. Looking ahead, the Insolvency Service's strategy
for the coming 3-5 years creates an even stronger, more resilient
organisation that is demonstrably delivering value and that is
able to respond to volatile changes in demand.
A new delivery strategy?
8. The Insolvency Service has now been considering
a new Delivery Strategy since early 2010, which has created uncertainty
for staff and added to the delay in delivering much needed improvements
to The Service. We understand that the new Chief Executive will
want to put his own stamp on the new strategy, but it is important
that The Service moves swiftly to the delivery stage of that strategy.
In its response to our Report we will expect to receive a clear
timetable for the implementation of the new strategy for The Insolvency
Service. (Paragraph 16)
9. The Insolvency Service agrees that there is
a need to reduce uncertainty for its employees. It is also clear
that operational improvements can be made and that legacy issues
from the recent spike in demand must be tackled. This needs to
be done in a way that builds on the many strengths of the agency
and that sustains high levels of service.
10. A high level strategy, covering a 3-5 year
period, was endorsed by the Department for Business, Innovation
and Skills (BIS) and published internally in October 2012. This
replaces the previous Delivery Strategy. This has led to early
action in specific areas:
- The agency has revised its
Board and governance arrangements to establish the necessary leadership
capability to take its plans forward. This includes appointment
of 3 new Board members who bring a breadth of experience and knowledge
to the Board. The new arrangements apply from 1 April 2013.
- It has worked closely with BIS to secure support
and initial funding for its restructuring plans. This has enabled
a start to be made on tackling overcapacity from falling case
numbers. A recently completed voluntary redundancy exercise targeted
at junior examiner grades together with a voluntary exit scheme
focussed on management grades has improved the balance between
demand and resource.
- It has begun projects in a number of operational
areas that will be progressed further during 2013. These include
reviewing options for funding models, rationalising estates and
improving its IT infrastructure.
11. The Insolvency Service's Plan for 2013/14,[1]
which was published in March 2013, builds on these first steps
and identifies action for the coming year to support the 3-5 year
high level strategy.
Reductions in the workforce
12. We applaud the fact that the staff of
The Insolvency Service have maintained their high levels of service
throughout the difficult period of staff reductions and budget
cuts. However, there is a risk that further reductions in annual
running costs and staff may put undue pressure on its ability
to deliver. In particular, The Insolvency Service will have to
prove to us that it is sufficiently robust to deal with any potential
substantial increase in insolvency casework. (Paragraph 21)
13. The Government welcomes the recognition that
high levels of service have been maintained in recent years. It
also understands the Committee's concerns that this might change
in the future. The recent major reductions seen in the Insolvency
Service's workforce have primarily been due to step changes in
the level of demand for its Official Receiver services. It is
recognised that demand varies, and there is sufficient contingency
and flexibility in the agency's resources to deal with expected
fluctuations over the next few years.
14. In the early part of the last decade Insolvency
cases rose rapidly to a peak in 2008/09 and 2019/10, requiring
the Service to increase its staffing accordingly. However, since
this peak, the insolvency sector as a whole has seen reductions
of almost 20% in personal and company insolvencies, with the Service
seeing an even greater reduction in bankruptcies (almost 60%),
see table 1.
15. The Insolvency Service is planning for a
further reduction in caseload during 2013/14. This planning assumption
is based on econometric forecasts, overlaid by expert opinion
drawn from across the insolvency sector.
Table 1 - Insolvency case numbers 2002
to date
| New Cases
| Bankruptcy
| Company Liquidation
| Total Cases
|
| Debtor Petition
| Creditor Petition
| |
|
| 2002/03 | 17,587
| 7,612 | 6,598
| 31,797 |
| 2003/04 | 21,718
| 7,966 | 5,066
| 34,750 |
| 2004/05 | 29,619
| 7,943 | 4,477
| 42,039 |
| 2005/06 | 43,404
| 9,982 | 5,605
| 58,991 |
| 2006/07 | 54,902
| 9,708 | 5,329
| 69,939 |
| 2007/08 | 52,324
| 10,033 | 4,861
| 67,218 |
| 2008/09 | 60,931
| 11,129 | 5,969
| 78,029 |
| 2009/10 | 61,981
| 10,499 | 5,418
| 77,898 |
| 2010/11 | 45,223
| 8,102 | 4,473
| 57,798 |
| 2011/12 | 30,749
| 7,720 | 5,125
| 43,594 |
| 2012/13 (forecast)
| 23,350 | 5,900
| 3,950 | 33,200
|
16. In practice, there is a time lag for the
Official Receiver teams to see the full impact of falling case
numbers. For example, complex creditor and company insolvency
cases will often run for more than 12 months and dealing with
long term assets such as property can take even longer. Workloads
will also change as the relatively straightforward debtor cases
form a smaller proportion of the total. This picture is further
complicated by the geographic distribution of the cases and skill
mix required.
17. Nevertheless, even when account is taken
for these factors, there remains some overcapacity within the
Insolvency Service. In 2009/10, there were over 2,000 people delivering
Official Receiver Services. In 2012/13, there were 1100 people—a
reduction of 45% against a fall in case load of 60%. As stated
in paragraph 10, a start has already been made to tackle this
overcapacity.
18. Future changes and further reductions in
employee numbers are envisaged as part of the Insolvency Service's
strategy, as it balances its resources with forecast demand and
improves operational efficiency. Working to a 3 year timeline
allows changes to be made in a measured way, to account for changing
market conditions over this period and to ensure that service
levels are sustained. In setting resource levels, the agency recognises
the need to retain sufficient operational flexibility to manage
typical fluctuations in demand and to leave sufficient contingency
to deal with an unexpected reversal in case numbers.
19. As part of planned reviews of its operational
processes, the Insolvency Service will be exploring mechanisms
for dealing with significant future shifts in caseload of the
type seen in recent years. There are many positives to be taken
from the experience of the past decade, not least of which is
the positive manner in which its people responded. However, there
are difficult legacy issues resulting from the approaches taken.
Any future response needs to be delivered in a more resilient
and sustainable way.
20. Looking beyond its Official Receiver activities,
demand for the agency's Investigations & Enforcement and Redundancy
Payments services has not diminished. The number of people engaged
on these front line activities has been largely maintained over
recent years. However, there has been a high degree of internal
change and movement of people within the Insolvency Service as
overall employee numbers reduced. The associated disruption had
an operational impact but is now settling down.
Reorganisation of office locations
21. We are concerned that the continued uncertainty
over the future of The Insolvency Service estate could have a
detrimental effect on the performance of The Service. If the estate
is to be rationalised, decisions on office closures cannot be
continually deferred. Any rationalisation of the estate will need
to demonstrate the ability to maintain existing levels of service
and delivery. (Paragraph 28)
22. The Insolvency Service agrees the need for
timely decisions and implementation of office relocations. It
also acknowledges the need to maintain current service levels
within a rationalised estate.
23. The agency has an estates footprint that
is about a third too large for its current needs. This leads to
a relatively high fixed cost base. This needs addressing as part
of ensuring that its public services can be delivered even more
cost-effectively.
24. The Insolvency Service finalised and published
its decisions on merging 3 pairs of sites (Newcastle/ Stockton,
Bournemouth/ Southampton, Medway/ Whitstable) in February 2013.
It is progressing implementation. Further estate rationalisation
is likely. Developing the detail forms part of the Agency's Plan
for the 2013/14 financial year.
25. Relocation decisions are not taken lightly.
They take into account customer and employee impacts, the requirement
to make best use of government estate, and the agency's strategic
as well as financial needs. The assessment also considers operational
risk and the need to maintain or improve existing levels of service.
Where significant change is proposed, the agency engages with
those groups of people affected and seeks to mitigate impacts.
26. As part of rationalising its estates, the
Insolvency Service is developing its use of remote interviewing
facilities. These are not staffed offices but facilities in wider
government buildings that can be used for the purpose of local
interviews. From the perspective of an interviewee, replacing
an office with an interview facility results in little change
from current service levels.
The funding model of the Official Receivers' Office
27. Funding for the Official Receiver Service
relies on a fee-generated income model. It is clear from the evidence
we received that this model is unreliable in the current economic
climate. We recommend that The Insolvency Service work together
with the Department for Business, Innovation and Skills to look
at alternative funding models that are sustainable and not wholly
reliant on unpredictable levels of casework and asset values.
(Paragraph 40)
28. The Insolvency Service and Department for
Business, Innovation and Skills (BIS) agree with the Committee's
recommendation to consider alternative funding models.
29. Actions on fees structures taken in 2010
are having a positive effect, with improved cash flow and significantly
reduced levels of write-off. The introduction of Debt Relief Orders
has also proved to be a more cost-effective alternative for cases
with low asset values.
30. Nevertheless, this is an important area to
explore further as part of ensuring greater financial stability.
BIS and the Insolvency Service have initiated a joint project
which is reviewing potential funding models. The intent includes
reducing the agency's financial exposure to factors such as case
volumes and asset values. The project will report its findings
and recommendations during 2013-14, and the agency will take forward
further work as appropriate.
Bankruptcy case administration fees-altering the
balance
31. At present, individual debtor bankrupts
have to pay an upfront fee of £525. Given the level of debt
relief they can receive we agree with The Insolvency Service that
it would not be unreasonable to increase that fee, possibly on
a sliding scale. We also agree that the fee should not be automatically
required to be paid up front but could be staggered along similar
lines as payments to debt management companies. We will expect
The Insolvency Service to set out progress in both of these areas
in its response to this Report. (Paragraph 43)
32. As the Committee has acknowledged, given
the levels of debt relief available, it is not unreasonable to
expect bankrupts to pay a fee that helps recover administration
costs. This fee also needs to be affordable. It should not be
a barrier to individuals seeking bankruptcy, if that is the appropriate
debt relief mechanism in their circumstances.
33. The project on funding models referred to
above (answer to Paragraph 40) also considers fee structures.
This includes exploring the possibility of fees being paid by
instalments and/ or linked to the discharge of the bankrupt. The
project will report its findings and recommendations during 2013-14,
and the agency will take forward further work as appropriate.
Published targets for The Insolvency Service
34. The target of 68 per cent for stakeholder
confidence in the enforcement regime has clearly proved a challenge
for The Insolvency Service. Public perception of resource pressures
may dampen stakeholder confidence but we do not accept that this
is the prime reason for The Service to miss its targets in this
area. Confidence in the enforcement regime is a key factor in
the success of The Insolvency Service. In its response to this
Report The Service must demonstrate that it has a strategy for
promoting the successes of the investigatory and enforcement regime
so that confidence in it can be better measured. (Paragraph 48)
35. The Government shares the Committee's view
on the importance of stakeholder confidence in the enforcement
regime.
36. Typical actions to enhance positive perceptions
revolve around increasing awareness, provision of information,
feedback and straightforward engagement. The Insolvency Service
already does much of this. For example, the agency:
- has significantly increased
the press coverage it receives, up from 283 articles in 2010 to
1085 in 2012, with the level of positive coverage also increasing
from 47% to 79% in the same period. Many of these stories relate
to investigation outcomes.
- has worked closely with a range of external organisations,
such as the Trading Standards Institute and the Metropolitan Police
to raise awareness of its enforcement activities and of how people
can raise concerns about possible director misconduct.
- has engaged with insolvency practitioners (IPs),
their recognised professional bodies and their trade body, R3,
to simplify reporting processes, enhance guidance and ensure improved
feedback on the outcomes of "possible misconduct" reports
provided by IPs.
There is, nevertheless, clearly scope for improvement
and the Service has an absolute ambition to improve confidence
in the enforcement regime.
37. Work is already underway to strengthen the
Service's communications on enforcement matters and to identify
those actions which will improve opinion of the enforcement regime.
This will include a strategic review of recent confidence survey
results, longer term trends and the effectiveness of actions previously
taken, as well as a range of actions already identified, including:
- Media training for Official
Receivers and senior investigators, to improve our interaction
with local newspapers and radio;
- Use of social media to improve the reach of our
messages, and enhance our stakeholder relationships, and publicising
our successes in winding-up of companies and director disqualifications;
- Improved engagement with the wider business community
to promote our activity and encourage the reporting of misconduct.
Investigation and enforcement resources
38. Both the insolvency industry and The Insolvency
Service have recognised that resource constraints, both in terms
of funding and staffing, have had an impact on the investigatory
and enforcement regime. While we welcome additional funding from
the Department for Business, Innovation and Skills, we remain
concerned that this area of activity remains under-resourced.
(Paragraph 61)
39. The Government welcomes the Committee's support
for the investigation and enforcement work that the Insolvency
Service undertakes. Overall funding for this area has been maintained
in budgets for 2013/14.
40. The Insolvency Service acknowledges that
investigation and enforcement outputs have dipped since 2010.
This is primarily attributable to the high degree of change within
the agency as overall employee numbers reduced. There has been
a 38% internal turnover of employees within its Investigation
and Enforcement teams in recent years, with a higher proportion
of over 60% in front-line investigation roles. Overall numbers
of employees in this part of the agency have been maintained.
41. The position is improving as new teams and
skills embed. Although full year outputs for 2012/13 will show
continued impact, in the second half of this year the agency has
been delivering closer to expectations and to the levels seen
in previous years (e.g. over 600 disqualifications have been secured
in the past 6 months).
42. There is nothing to suggest that this temporary
dip in investigation outputs has had an impact on director behaviours.
There has not been an increase D1 reports by insolvency practitioners
as a proportion of non-compulsory corporate insolvencies—this
fell slightly from 35% in 2010-11 to 28% in 2011-12, and overall
stakeholder confidence in the regime is largely unchanged. Nonetheless,
as noted above (answer to paragraph 48), the Insolvency Service
needs to reinforce the profile of its investigation and enforcement
activities to counter perceptions of recent resource shortfalls.
43. We are strongly of the opinion that the
levels of disqualification of errant directors should not be determined
by an arbitrary level set in what The Insolvency Service describes
as the public interest. We believe that any dilution of enforcement
activity would send entirely the wrong message to delinquent directors
and recommend that the Department provides The Insolvency Service
with sufficient, and if necessary, additional funding to disqualify
or sanction all directors who have been found guilty of misconduct.
(Paragraph 62)
44. The Government recognises the contribution
that an effective disqualification regime makes to ensuring confidence
in the integrity of the business environment. Disqualification
is a powerful tool which can be used against those who abuse the
privilege of limited liability.
45. It is also important to recognise that the
fact a company has failed does not necessarily mean that the directors
are guilty of misconduct.
46. The number of disqualifications obtained
by the Insolvency Service is not set at an arbitrary level. The
Insolvency Service aims to take forward any case referred to it
where evidential and public interest criteria are both met. The
primary test in deciding whether to proceed with disqualification
is an evidential one. There needs to be a realistic prospect of
a successful disqualification, which is generally interpreted
by the agency as an over 50% chance of success. A subsequent public
interest test may then be used, if necessary, to determine prioritisation
of activities. This prioritisation ensures sufficient balance
to the different types of investigations progressed by the agency
(i.e. not just disqualifications, but also bankruptcy restrictions
or winding up orders).
47. As noted above (answer to Paragraph 61),
extensive internal change within the Insolvency Service has had
a temporary impact on outputs since 2010. Over the past 3 years,
some 2.5% of disqualification cases identified in the initial
assessment as suitable for investigation were not commenced. This
is a number that the agency seeks to minimise. The public interest
tests ensured that these cases were of low severity and that an
overall balance in the types of cases progressed was maintained.
48. Current levels of investigation and enforcement
activity are closer to that seen in previous years. On that basis,
this should be sufficient to maintain the integrity of the business
environment. Nonetheless, given the concerns raised by the Committee
and feedback from insolvency practitioners on the numbers of "possible
misconduct" reports being taken forward, the Insolvency Service
intends to look again at how it assesses and prioritises cases.
This will be done during 2013/14, with the goal of ensuring greater
transparency on its processes and shared expectations on its investigation
and enforcement outputs.
Reform of pre-packs
49. We therefore recommend that together,
the Department and The Insolvency Service commission research
to renew the evidential basis for pre-pack administrations. (Paragraph
72)
50. The Government has recently announced an
independent review which will enable further evidence to be gathered
on how pre-packs are working in practice, and whether further
steps are required. This addresses the Committee's recommendation.
51. The review will be launched in the summer
after the Service has reported on its current monitoring of pre-packs
(as described below) and the new SIP 16 controls on pre-packs
have been put in place (answer to Paragraph 80, below).
52. The Insolvency Service has continued to update
its intelligence on pre-packs. In particular, the agency has been:
- investigating, on a risk assessed
basis, the use of pre-packs by small to medium sized Insolvency
Practitioner (IP) firms where there have been a number of previous
instances of breaches of the Statement of Insolvency Practice
(SIP16).
- monitoring the relationship between IPs and online
introducers to see whether the pre-pack process is being abused
through misleading advertising.
53. Where the Insolvency Service identifies possible
misconduct on the part of an IP, this is referred to the recognised
professional body for consideration and possible action.
54. The Insolvency Service routinely liaises
with academics undertaking research into insolvency. On the topic
of pre-packs specifically, it engaged with research into the control
exercised by secured creditors over insolvent companies. The question
was whether there is evidence of exploitation of conflict of interests
in a pre-pack where the sale is back to a connected party. (This
research found no evidence of this.) Another example is the agency's
provision of relevant data and insight from its experience to
support academic research into the important issue of valuations
in a pre-pack.
Penalties for non-compliance
55. In May 2009, our predecessor Committee
expressed concerns about the lack of transparency, resultant abuse
of pre-pack administrations and their link to 'phoenix companies'.
Despite the introduction of Statement of Insolvency Practice Note
16 and additional guidance, pre-pack administrations remain a
controversial practice. The Insolvency Service is committed to
continue to monitor SIP 16 compliance, but to make this effective,
non-compliance needs to be followed through with stronger penalties
by way of larger fines and stronger measures of enforcement. (Paragraph
80)
56. The Government is committed to ensuring effective
enforcement.
57. The Insolvency Service is strengthening its
role as the oversight regulator of the IP profession. A new senior
post to lead related activities will be filled shortly. This will
include working with the insolvency regulators to drive action
on commitments that will enhance enforcement and improve confidence
in the proper use of insolvency frameworks.
58. A revised and strengthened SIP16 and common
sanction guidance is close to implementation. This is expected
to be in place over coming months. The new SIP16 will require
IPs to move faster in informing creditors about pre-packs. It
will also require a specific and explicit statement by the IP
to confirm that a pre-pack was the most appropriate method of
producing the best return for creditors.
59. The Insolvency Service is working with the
insolvency regulators to develop and publish common sanction guidance.
This will increase transparency and will help complainants understand
the complaints process and disciplinary outcomes. This should,
over time, lead to increased confidence in IPs.
60. Where there is evidence of material detriment
to creditors as a result of IP behaviours, the Government is committed
to ensuring that regulatory bodies enforce strong penalties and
that those penalties are made public.
61. We recommend that The Insolvency Service
amend its monitoring processes to include feedback to each insolvency
practitioner and their regulatory body where SIP 16 reports have
been judged to be non-compliant. We further recommend that the
criteria by which SIP 16 reports are judged should be published
alongside the guidance. (Paragraph 81)
62. The monitoring which the Insolvency Service
has so far conducted has focused primarily on the extent to which
IPs have complied with the disclosure requirements of SIP 16.
This has revealed significant levels of non-compliance, but in
many of the cases the non-compliance was of a minor and technical
nature and did not result in material detriment to creditors.
The agency has responded through a programme of education with
IPs to ensure the requirements of the SIP were understood (including
a webinar).
63. As noted above (response to Para 72), the
Insolvency Service is focussing resource to enhance its intelligence
on the use of pre-packs through targeted investigation. This is
going beyond simply reviewing SIP compliance to assess potential
abuse of the pre-pack procedure. Where potential abuses of any
significance are found these are reported to the relevant regulatory
body so that appropriate action can be taken.
64. SIP16 is currently being revised and strengthened.
Pending the introduction of the revised SIP16, the criteria by
which reports are being judged is compliance against the existing
SIP16, read together with the guidance given to insolvency practitioners
in Dear IP No 42 in October 2009. That guidance was produced
in consultation with the Recognised Professional Bodies and has
been issued to all insolvency practitioners by the Insolvency
Service.
65. The guidance was published on the Insolvency
Service's website and is available at: http://www.insolvencydirect.bis.gov.uk/insolvencyprofessionandlegislation/dearip/dearipmill/fullissue42.doc
Continuation of supply
66. We recommend that the Department undertake
a consultation as a matter of urgency on the rules relating to
the continuation of supply to businesses on insolvency in order
to assess whether a greater number of liquidations or further
damage to businesses could be avoided if that supply was better
protected. (Paragraph 86)
67. The Government agrees with the Select Committee
that this is an important issue.
68. There is already in the legislation a limited
list of providers who may seek a personal guarantee from an insolvency
practitioner before continuing to supply to an insolvent business,
but who may not demand payment of pre-insolvency debt as a condition
of further supplies.
69. The Government recently tabled an amendment
to the Enterprise and Regulatory Reform Bill currently before
Parliament which extends this to IT suppliers and on-sellers of
utilities. The amendment will enable new powers which, when exercised,
would render void those contractual terms that allow withdrawal
of specific business critical supplies to a company that has entered
certain formal insolvency procedures, or to change the terms for
such supply, on account of the insolvency.
70. The reason for taking powers as opposed to
changing the law is to enable consultation to take place on the
detail. The Government will consult with interested parties before
deciding how and in what terms to exercise the new powers.
Complaints against Insolvency Practitioners
71. We welcome the news that the insolvency
industry and the regulators have been working together to create
common regulatory standards across the profession. The creation
of a single gateway for complaints, common standards and a common
appeals process would be an important step in this regard. We
agree that The Insolvency Service, in regulating the recognised
professional bodies (RPBs), should have a wider range of powers,
very much akin to those that the RPBs themselves have in disciplining
their members. (Paragraph 97)
Many insolvency complaints are about the legal
framework or a creditor's financial loss rather than a failing
in the insolvency practitioner's conduct. Often complainants are
simply dissatisfied with an insolvency and the financial loss
they have suffered. A simplified complaints system, which included
greater publicity about the operation and scope of the current
system, signposting of disciplinary outcomes and expectation management
of potential complainants, could go some way to providing a clearer
picture of the work of insolvency practitioners. We expect the
industry, as a matter of good practice, to publish an annual report
detailing complaints and progress in this area. (Paragraph 98)
72. The Government welcomes the Committee's endorsement
of the proposed reforms.
73. Work on these reforms is well under way.
A new complaints gateway means that in future virtually all complaints
about IPs will come first to the Insolvency Service, where they
will be subject to an initial assessment before being forwarded,
as appropriate, to the relevant Recognised Professional Body (RPB)
for action. This, together with common sanctions guidance and
measures to introduce greater consistency across the appeals processes
for insolvency practitioner complaints, will be the first reform
measures in place. These will be implemented by the summer.
74. The Government has also said that it intends
to strengthen the powers of the Insolvency Service as oversight
regulator when legislative time permits.
75. The Insolvency Service already publishes
a review called the, 'Annual Review of Insolvency Practitioner
Regulation', which details complaints against Insolvency Practitioners
and any published sanctions handed out. It intends to continue
publishing this.
Remuneration of IPs
76. Insolvency practitioner fees continue
to be a vexatious issue and more needs to be done to educate the
public and creditors about the fee-setting regime. We welcome
the announcement of the review led by Professor Kempson and expect
an update on progress on this issue in the response to this Report.
(Paragraph 107)
77. The Government is pleased to see Select Committee
support for the recently announced review of IP fees. The review
is expected to produce final recommendations for consideration
by the Secretary of State and the Minister with responsibility
for insolvency issues by the end of June 2013.
78. We welcome The Insolvency Service's continued
monitoring of compliance by insolvency practitioners with the
Statement of Insolvency Practice Note 9. Whilst we recognise that
unsecured creditors will not be comforted by this alone, more
needs to be done to advertise the process of creditors committees.
We also believe it is important for The Insolvency Service to
encourage unsecured creditors such as the HMRC, Government Departments,
and the Redundancy Payments Service to actively participate in
creditor committees. (Paragraph 108)
79. The Insolvency Service, via its involvement
in the Joint Insolvency Committee, continues to monitor the effectiveness
of all Statements of Insolvency Practice.
80. Government agencies are often an unsecured
creditor in insolvencies and therefore have an important role
to play. Both HMRC and the Insolvency Service's Redundancy Payments
Service take their responsibilities seriously. They intervene
when they believe doing so will result in a better return for
creditors.
1 http://www.publications.parliament.uk/pa/cm201213/cmselect/cmbis/301/301.pdf Back
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