Click here to find your solution today

Insolvency Service admits to concern over funding

JobsThe Insolvency Service has admitted that a lack of ‘asset rich’ cases are causing a problem for their budget and is one of the fundamental reasons why it has been forced to downsize.

The Service has announced in the last month that it has had no option than to radically review its staffing levels as well as the caseload each office around the country handles.

One of the directors of the Insolvency Service, Claire Entwistle, said that part of the problem had been caused by a reduction in the number of asset rich cases compared to those with little or no assets. Ms Entwistle told online financial site, Insolvency Today, that the Service had been expected to handle at least 50,000 cases during 2011 but would not be able to achieve anywhere close to the forecast and anticipated the number dropping even further during the next 12 months.

Ms Entwistle added that their ‘cost base’ was now proving to be no longer workable given the changes in the case balance that was being seen by the Service.

The Service director also confirmed that there would be branch closures around the country and whilst Bournemouth, Medway and Stockport had already been announced as shutting, there could be further offices to follow. She added that the Service was in the midst of a major internal review and all aspects of the operation were currently being evaluated for cost-effectiveness.

The Insolvency Service has said that going forward, the aim is to create eight large regional centres with an additional 17 satellite offices locally. This marks a significant change in the setup of the organisation and has meant that there have been redundancies nationwide. This loss of staff has meant that the Service now has to look at the distribution of work and make sure there is the right balance of knowledge and experience, as well as management in each location. Historically the Service had expanded on a local basis as and where the work required more staff to administer it. However, this approach was widely considered to be unsustainable given the current economic pressures and a restructuring was ordered.

Ms Entwistle said the changes would take some time to implement with considerations such as the IT infrastructure as well as staffing to be considered. However, she said that there would also be other revamps within the Service with better guidance being provided to practitioners to help increase effectiveness.

Whilst changes are en vogue at the Insolvency Service, not everyone agrees that the changes are quite as radical as had been hoped.

A financial expert, Professor Iain Ramsey from the University of Kent, said that the government had ‘dropped the ball’ over the chance to overhaul the insolvency service. Professor Ramsey described the Service as ‘piecemeal’ and ‘relatively complex’ and said that it could have been rationalised far further.

Professor Ramsey was attending the Select Committee at the Department of Business, Innovation and Skills, where the subject of debt management firms was under the spotlight.

As well as discussing the effectiveness and efficiency of the insolvency service, the debate also centred on the growth of payday lenders and ensuring that anyone opting to use debt management services received both ‘good quality and a fair price.’ The committee discussed and debated possible tighter regulation in the consumer credit industry.

Also attending the parliamentary debate were representatives from the Consumer Focus Citizens Advice, Money Advice Trust and Consumer Credit Counselling Service.

Find the right solution

Answer a few simple questions and we'll help you find your solution.
  • Total unsecured debt: £500

  • This field is for validation purposes and should be left unchanged.

Find the right solution

Answer a few simple questions and we'll help you find your solution.
  • Total unsecured debt: £500

  • This field is for validation purposes and should be left unchanged.
Click here to view the RSS feed