R3’s Press, Policy and Public Affairs update, May 2021
04 June 2021
Spring is traditionally a time of new beginnings, and therefore it was fitting that the announcement of R3's new CEO, Caroline Sumner, was made in May.
Caroline takes over as CEO after five years as R3's Head of Technical, Training and Education, during which she drove a number of R3's major projects, and has been a member of R3 since the early 1990s, when it was known as SPI.
Commenting on her appointment, Caroline said, "This is a pivotal time for insolvency and restructuring as the country emerges from the pandemic, and businesses and individuals look to the profession to help them recover from the economic damage it has caused."
With insolvency likely to be high up the news and political agenda in coming months, we were proud to launch our Value of the Profession report in mid-May. Subtitled "How insolvency and restructuring supports the UK economy", the report, which was carried out in conjunction with Savanta ComRes, found that the insolvency and restructuring profession rescued 297,000 jobs and returned £1.82bn to creditors in insolvency cases in 2019 - the equivalent of around 800 jobs and £5m a day.
We are very grateful to all those member firms which responded to the survey, which will be a very useful tool for us as we act as the voice of the insolvency and restructuring profession, demonstrating the concrete contribution our members make to the smooth functioning of the economy and the wider business environment.
Early May saw the start of the breathing space scheme for people in debt. As something that R3 long campaigned for, we are delighted to see it become a reality, giving a crucial respite period for people whose finances have got out of hand to take stock, free from creditor pressure, and decide what steps they need to take to find a route towards financial stability, be that personal insolvency or an informal solution. The Insolvency Service has reported that over 6,000 people have taken up the scheme in its first month of operation, which is very welcome news.
There was more good news from the Government, with the publication of the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill, which will close the loophole which means that, currently, companies which are dissolved do not face the same level of scrutiny as companies which are closed through a solvent or insolvent liquidation.
Our post on the topic sets out our view that this is very much a positive step - and something the profession has wanted for some time - but that it will only bring the maximum benefit if the investigatory resource available to the Insolvency Service to look into potential misbehaviour by directors is increased in step with its new powers.
We were pleased to be mentioned in the House of Lords, meanwhile, during the debate on the extensions to the temporary measures in the Corporate Insolvency and Governance Act prompted by the coronavirus pandemic. Lord Leigh and insolvency minister Lord Callanan both referred to R3's points during the discussion, with Lord Leigh noting our observation that the temporary measures - while necessary for many companies' continued trading - cannot continue indefinitely.
In the news
R3 Vice-President Christina Fitzgerald's comments on the insolvency statistics in England and Wales for April 2021 formed the basis of an article in the Daily Express and were mentioned in the Independent, as well as in regional and trade titles including the Pembrokeshire Herald, the Lancashire Evening Post, and the Portsmouth News. Our commentary on the statistics for Q1, published at the very end of April, continued to receive good pick-up, and ran in titles including the Sunderland Echo, the Eastern Daily Press, Dow Jones, and the Oxford Mail.
The Value of the Profession report was well-received by the trade press, including Credit Strategy, CCR Magazine, and Scottish Business News, as well as Irish News. Our statement welcoming the new breathing space scheme was picked up by a range of titles, from the Cornish Times to the Shields Gazette.
R3 members can provide advice on a range of business and personal finance issues. To find an R3 member who can help you, click below.