R3’s Press, Policy and Public Affairs update August 2020

04 September 2020

The Value of the Profession survey, a response to a consultation on insolvent energy companies, media enquiries and preparing two new campaigns have kept R3's Press, Policy and Public Affairs team busy in August.

With the introduction of secondary preferential creditor status for HMRC from December, as brought in by the Finance Act, we are planning the next stages of our campaign against the policy, and will be engaging with members to seek views on the policy's impact once it takes effect.

The financial outlook for many businesses and individuals is looking tough, and we are keen to highlight the key role insolvency and restructuring professionals will play in helping businesses and the economy recover from the damage done by the pandemic. In response, we have launched a new campaign, "Back to Business UK", to improve understanding of the insolvency and restructuring profession, the work our members carry out, and the environment in which the profession operates - along with the benefits that can be gained through seeking early advice.

In other policy news, we submitted a response to Ofgem's Supplier Licensing Review consultation. We are concerned that the proposals in this consultation which deal with what happens when an energy company enters an insolvency procedure lack consideration of insolvency practitioners' statutory duties when acting as office holders, and do not recognise the practical difficulties that office holders often face in dealing with insolvent energy suppliers.

Having previously engaged with Ofgem on the issues raised, it is disappointing that our points have been noted but not fully addressed, but we will continue to engage with Ofgem to convey the profession's views. Read our blog post here.

The publication of the draft legislation for "The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020" (or 'breathing space scheme' for short) is welcome news, as the scheme is something that R3 has long called for. Due to come into effect as of 4 May 2021, the scheme will give people in problem debt a period of time (60 days initially) in which to consult a debt advisor and decide on an appropriate remedy for their situation.

We will look through the draft legislation in tandem with our Technical team, to see if there are any glaring issues which need to be addressed, but as we have already consulted extensively with the Government about the scheme, we are hopeful that it should be ready for introduction.

Press update

Media interest in the profession, its processes and the demand for the skills of insolvency and restructuring professionals continues. R3 spokespeople have continued to brief journalists from a range of outlets, with interest this month from, among others, Global Restructuring Review, the Financial Times, and Accountancy Age.

R3's commentary on the insolvency statistics for July was covered in the Times, the Daily Mirror, and Dow Jones, as well as by a range of regional and trade outlets. Our earlier research into insolvency and restructuring professionals' predictions about future insolvency numbers (both corporate and individual) continued to pick up coverage, including in the Scotsman.

Value of the Profession research

Our huge thanks to everyone who completed the Value of the Profession survey, which closed at the end of August. Along with our research company Savanta ComRes, we are now analysing the data and are looking to launch the research in the final quarter of this year.