PPP update: June 2021

12 July 2021

As we reach the mid-point of 2021, the public affairs agenda continues to be busy, with the Government making a number of insolvency and restructuring-related policy announcements, deadlines for consultations and calls for evidence passing, and debates in parliament continuing. 

These, coupled with the launch of a new resource for company directors, and continued media interest in the profession and its work, have kept our Press, Policy and Public Affairs team busy throughout June…  

Reviewing the Rules 

A key area of work for the team has been responding to the Government’s call for evidence on the Insolvency Rules, which closed for submissions on June 30. 

This review marked the first time the rules have been examined since they were introduced in 2016. In our response, we called for a number of revisions to help the profession, creditors and other stakeholders, and to provide a better practical framework for the operation of the UK’s insolvency framework. 

Now our response has been submitted, we look forward to hearing what the Government’s next steps are, and working with them to help this important aspect of the framework evolve. 

A letter from the Business Secretary 

In mid-June, we received a letter from Kwasi Kwarteng MP, Secretary of State for Business, Energy and Industrial Strategy, in response to one we wrote jointly with the Institute of Directors in May about the important role that HMRC will play in supporting business rescue in the months ahead.

The Secretary of State made several encouraging points – his agreement that all insolvency stakeholders – including HMRC – should support company rescue wherever possible, that HMRC will ‘take a cautious approach to enforcement of debt owed to Government that will have accrued during this period’, and that engagement with HMRC is critical for companies looking to turn their situation around. 

This recognition of HMRC’s role marks a positive step forward by the Government, and we will continue to work closely with officials and others to ensure that the points mentioned by the Secretary of State become a reality.

The response to our joint letter was also covered by a range of national, regional and specialist trade outlets – including Sky News online, BBC.co.uk, and a front-page story in the Financial Times. 

Working to identify diversity and inclusion issues 

In March we announced a joint project with the Insolvency Service to help improve diversity and inclusion in the profession. In June, we launched the first major piece of work for it in the form of the R3 Diversity and Inclusion Survey – a survey of R3 members to identify diversity levels in insolvency and restructuring.  

This survey aims to analyse how diverse the profession currently is and, in doing so support the identification of any barriers to joining, progressing, or succeeding in insolvency and restructuring.

We hope it will provide an accurate picture of where those working in the profession come from, whether barriers to joining the profession do exist, and, ultimately, help to remove any obstacles to becoming part of it.

If you haven’t received an email about completing the survey, please contact Giorgio Buttironi, R3’s Public Affairs Manager. 

Helping directors get Back to Business

At the end of June, we launched a new guide for directors and business owners that outlines the signs of financial distress and the options open to them to address any financial difficulties their business faced.

Get Back to Business: A guide to dealing with corporate financial distress, is available for free from our dedicated Back to Business website, and aims to make it easier for directors to understand their insolvency and restructuring options and take action to resolve the financial issues facing their firms.

Since the guide was launched, it’s been shared by a range of business bodies, including the IoD, the CBI, and the FSB, and mentioned in a number of stories in regional and specialist media outlets. 

R3 in parliament

In May, we welcomed the news that the Insolvency Service was set to be granted new powers by the Government to "investigate directors of companies that have been dissolved, closing a legal loophole and acting as a strong deterrent against the misuse of the dissolution process", as part of the recently-announced Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill. 

The Bill had its Second Reading in the House of Commons on June 28. Ahead of it, our Public Affairs team was busy briefing MPs on the profession’s views on the proposed legislation. 

As a result of their work, R3 was mentioned directly by the Shadow Insolvency Minister, Seema Malhotra MP. Our point of caution that these new investigations into directors of dissolved companies shouldn’t come at the expense of existing investigations into directors of insolvent companies, was also raised by the Shadow Minister for Local Government, Jeff Smith MP.  

Our Immediate Past President Duncan Swift was then invited to give evidence at the legislation’s Public Bill Committee session on July 6th.

R3 in the media

In addition to our work promoting our Back to Business guide, and the media coverage generated by the Business Secretary’s response to our joint letter, R3 spokespeople have been quoted in several regional and specialist media outlets commenting on the Government’s decision to extend the ban on winding up petitions and statutory demands, and on May’s insolvency statistics for England and Wales – the latter of which was also covered by the Dow Jones newswire.  

We’ve also briefed journalists from a number of media outlets on issues that include future insolvency trends, the ending of Government support, and CVAs.