Deregulation Bill

Written evidence submitted by R3 (DB 08)

Committee request: Cost of Joint Insolvency Examination Board exams

Thank you very much again for inviting R3 (the leading trade body for the UK’s insolvency profession) to give evidence to the Public Bill Committee on Clause 10 and Clause 12. During the evidence session the Minister (Mr Oliver Heald MP QC) asked a question regarding the typical training costs charged by the main education providers for each of the three Joint Insolvency Examination Board insolvency papers. As I was unable to provide these details during the Committee session, I am pleased to provide this information below.

Under the current licence Insolvency Practitioners (IPs) must sit three exams:

· Liquidations

· Administrations, Company Voluntary Arrangements (CVAs) and Receiverships

· Personal Insolvency

Most students study these exams through BPP, which until recently was the dominant training provider of JIEB courses. The costs for 2014 as set out by BPP are as follows:

· £2,892 plus VAT for each exam

· £8,676 plus VAT for all three exams

· Exam fee payable to the student’s professional body:

o £310 for one paper (2013)

o £620 for two or more papers (2013)

The total cost for all three exams and exam fees for two or more papers (plus VAT) is therefore approximately £9,296.  

Clause 10 proposes that an IP can train in either corporate or personal insolvency. We believe this will require sitting one paper, and so therefore the costs of that exam should be reduced. However, we are concerned that the government has not asked the training providers for evidence to that effect, or what the new papers should look like. They have however told us that the new personal paper will need to include elements of corporate insolvency and vice-versa, and given the extra regulatory costs of two new licences, any costs savings are therefore illusory.

Furthermore, as I informed the committee last week, more than 90% of smaller insolvency practices claim they will not train an IP in a partial licence because they believe IPs should be fully trained in both disciplines to understand the UK’s insolvency regime – which is currently the 7th most competitive in the world (according to the World Bank). We believe partial licences will undermine this rating.

Partial licences will inevitably harm and confuse businesses and individuals seeking financial advice; they will delay the time that it takes to provide businesses and individuals with an insolvency solution which gives them debt relief, and delay the time it takes for returns made to creditors.

March 2014

Prepared 5th March 2014