2021: The year in insolvency and restructuring
21 December 2021
This year saw the Press, Policy and Public Affairs team continue our Back to Business UK campaign, publish research into the profession’s economic contribution, and continue to give the profession a voice in parliament and the media as the Covid pandemic continued and new legislation was proposed, debated and entered into law. Included below are just a few highlights from the many areas in which the team has worked on behalf of the profession in 2021.
Highlighting the importance of early advice
As part of our Back to Business UK campaign, aimed at helping improve directors’ understanding of the profession and the importance of seeking early advice, we launched a new guide for directors and business owners outlining the signs of financial distress and the options open to them to address them.
This resource was promoted to a wide audience including every MP and councillor in England and Wales, regional and trade media, and the wider business community.
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 range of stories in regional and specialist media outlets.
Demonstrating the value of the profession
In mid-May, we launched our Value of the Profession report, which showed 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.
The Press, Policy and Public Affairs team drove the successful delivery, launch, and promotion of the report, providing R3, its members and the profession with statistics that demonstrate the contribution of the insolvency and restructuring profession to the economy and the wider business environment.
A voice in the debate on regulation
In September, the All-Party Parliamentary Group (APPG) on Fair Business Banking published a report on insolvency regulation. While we recognise that improvements can be made to the current regulatory framework, elements of the report showed a lack of understanding of it, the difficult circumstances in which the insolvency profession works, and the critical role it plays in rescuing businesses, preserving jobs and creating the confidence to trade and lend by returning money fairly to creditors.
The PPP team lead R3’s response to the inquiry and subsequent report, secured nation-wide media coverage of R3’s views defending the profession and ensured the profession was represented at the APPG’s parliamentary roundtables by Caroline Sumner, R3’s CEO.
Our parliamentary engagement has seen R3’s views and the profession’s interests raised at every opportunity – aside from helping to inform policy debate, we have earned a number of mentions in parliament in 2021.
Most notably, in November we saw both Lord Leigh and Lord Fox defend the profession and call for a right of reply to criticisms raised by Lord Sikka and the APPG report. This may be the first time the profession has received such a defence in parliament.
The profession in Parliament: proposals to tackle director misconduct
This year was also busy on the legislative front, with a number of new policies and laws passing through Parliament.
The introduction of the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act was a welcome – if not perfect – piece of legislation this year. This Act will mean that directors of dissolved companies will be put on a more equal footing with their peers at active and insolvent companies, where the Insolvency Service has existing powers to investigate potential wrongdoing, and to exercise sanctions against directors who have been found to have acted dishonestly.
We were pleased to see R3’s views on the Bill referred to extensively in Parliament and our concerns raised in briefings with parliamentarians translated into tabled amendments to the Bill, prior to it receiving Royal Assent. We were also invited to give evidence to the House of Commons’ Public Bill Committee at the beginning of July, with our Immediate Past President Duncan Swift representing R3 at this session.
Seeking solutions on pensions fraud
With pension fraud cases on the rise, in September we arranged a stakeholder policy roundtable in the form of our pensions fraud discussion, which brought together senior members of the profession, pension providers, key stakeholders from the finance and fraud prevention sectors, as well as criminal enforcement agencies.
We were keen to hear views from across the community as to whether the current framework for tackling pensions fraud is fit for purpose, where the current gaps exist and how they might be filled, further positioning R3 as a key voice on this issue, as well as being a convener of key stakeholders on insolvency fraud matters.
Reviewing the Insolvency Rules
This year, the Insolvency Service announced a first review of the Insolvency (England and Wales) Rules 2016, and issued a call for evidence to garner a range of views.
Throughout March, we led sessions with several of our committees, to find out members' views on how the Rules are working in practice. 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.
As we head into 2022, we look forward to engaging with the Government’s consultation on this issue and promoting the best interests of the profession and our members.
R3 in the media
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 response to our joint letter was covered by Sky News online, BBC.co.uk, and a front-page story in the Financial Times.
Other national media coverage included our response to the APPG’s report, which featured in a story in the Times, comments on temporary insolvency measures featured in the Financial Times and the Daily Telegraph and the publication of a letter from Nicky Fisher, R3’s Deputy Vice-President in The Financial Times, in response to an editorial on the future of insolvency regulation.
In addition to this, our comments on the monthly and quarterly insolvency statistics continue to be popular with national, regional and specialist press alike, while our regional media campaign around the ending of the furlough scheme featured in more than 40 publications across the UK.
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