The whole of the insolvency sector makes an extremely important contribution to the government’s growth agenda by giving confidence to investors and helping those with unsustainable debts to move on. We can all take pride in contributing to an insolvency regime that is highly regarded internationally.

Earlier this summer our annual report recorded strong progress during 2013/14. As well as achieving all our published targets (and in many cases exceeding them), highlights include:

• managing almost 27,500 new insolvency cases (mainly bankruptcies) and making 26,871 debt relief orders, so supporting some of the most vulnerable in society
• disqualifying more than 1,200 directors, and so avoiding damage to the economy estimated at £120 million
• realising assets so that we have £32 million for distribution to creditors, from cases that typically had low levels of assets
• establishing the complaints gateway to provide a single point of entry for complaints about insolvency practitioners
• processing over 75,000 redundancy payments faster, with 85% of claims now settled within 3 weeks.

More impressively, these achievements are set against the backdrop of a challenging restructuring programme as we respond to a steep fall in bankruptcy numbers.

None of this is achieved in isolation. The past year has seen numerous successes and benefits from working collaboratively with you, our stakeholders and partners. In re-establishing this newsletter, we are keen to reinforce this. It will keep you in the picture on improvements to the breadth of public services we deliver to those affected by insolvency and on enhancements to the insolvency regime to maintain our global reputation. I hope you enjoy reading it.

In November I will take up a new role as chief executive of the Health and Safety Executive. While sad to leave the Insolvency Service and many wonderful people across our agency, I do so confident of its ability and readiness to face future challenges.  I have enjoyed working with you and your organisations and I know the agency looks forward to continuing this collaboration into the future.

Dr Richard Judge
Inspector General and Chief Executive

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Britain’s insolvency regime is very well regarded and planned changes are designed to deliver further improvements. Legislation currently before Parliament will streamline insolvency law removing unnecessary costs and ensure effective oversight of insolvency practitioners. Provisions in the Small Business, Enterprise and Employment Bill will:

• encourage greater use of electronic communication and remove administrative processes which add no value to creditors. These measures were developed with stakeholders as part of the government’s Red Tape Challenge and will save businesses creditors an estimated £20 million annually
• change the regulatory framework for insolvency practitioners to deal effectively and efficiently with poor performance and abuse, providing greater confidence in the insolvency profession
• strengthen the company director disqualification process with greater intelligence sharing, enable the court to take greater account of previous company failures and introduce a new compensation order to help creditors
• create a reserve power to prohibit ‘pre-pack’ administration sales to connected parties should the package of improvements recommended in the recently published Teresa Graham report not be successfully implemented.

The Bill will be considered in committee by the House of Commons in October. If enacted, the provisions of the bill would come into effect in 2015 and 2016.

There are also deregulatory measures in the Deregulation Bill currently before Parliament, including measures to facilitate provision of bank accounts to undischarged bankrupts and to allow specialised authorisation of insolvency practitioners.

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Confidence that businesses are playing by the rules is fundamental to a well functioning market. Our investigators look at director and corporate behaviour of both insolvent businesses and live companies and we pursue those who have abused the system, removing them from the marketplace. We publicise many of the director disqualifications we achieve to provide a deterrent to others and give confidence that the rules of the market are being enforced. This work has real world consequences:

• land scams operated by 111 companies we wound up cost more than 1,700 investors over £96m; to date, 45 directors of those companies have since been disqualified for a total of 439 years
• we disqualified seven former directors of a solicitors practice who had been trading fraudulently and failed to keep proper books and records. More than £13 million was paid out to former clients of the practice from the Solicitors Compensation Fund

Collaboration with insolvency practitioners is critical to us in securing disqualifications for directors who have committed wrong doing. Last year over 1,200 individual directors were disqualified and we expect to achieve a similar number of disqualifications this year – 590 directors were removed from the marketplace by the end of August. This not only levels the playing field for competitor companies who are playing by the rules, it also prevents further damage to the economy with an estimated £100,000 net benefit for every director who is disqualified.

Vicky Bagnall
Director of Investigation and Enforcement Services

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