External Affairs update: February 2024

07 March 2024

Amidst finalising plans for R3’s President’s Lunch, earning recognition in a new report from Spotlight on Corruption, and a trip to the Royal College of Physicians for this year’s Fraud Conference, the leap year’s extra day was a welcome bonus for R3’s External Affairs team in what proved to be another busy month.

Holding senior executives to account

Towards the start of the month, the External Affairs team headed to Westminster for a panel session ‘After the Post Office scandal, how can senior executives be held to account for corporate wrongdoing?’ hosted by the APPG on Anti-Corruption and Responsible Tax and Spotlight on Corruption.

The session explored Spotlight on Corruption's latest report ‘Power Without Responsibility: The state of senior executive accountability for economic crime in the UK today’, with discussions covering how senior executives can be held to account for corporate wrongdoing, whistleblowing, and lessons learned from the Post Office scandal.

We were pleased to see R3 mentioned both in the report and during the panel session, highlighting that director disqualification alone is not a strong enough deterrent to prevent serious rogue directors from committing repeat frauds.

The report includes our recommendation that disqualifications should be just the first step in tackling rogue directors, and that the deterrent should be accompanied by prosecutions and the recovery of misappropriated assets.

The President’s Lunch

Plans for the External Affairs teams’ flagship event, the President’s Lunch, continued in February.

This year’s lunch will take place on the 11^th of March at the Cinnamon Club, and we are looking forward to connecting MPs and Peers with senior members of R3 to share views and experiences on the economic and business landscape and discuss the opportunities and challenges currently facing the insolvency profession.

The lunch also comes only one week after the 2024 Budget, which will give attendees an opportunity to discuss how it may impact businesses in the UK.

We are also looking forward to hearing from our keynote speaker Ben Chu, BBC News Newsnight Economics Editor, who will give his thoughts on the current economic landscape.

The future of fraud

On the 29^th of February, our team headed to the Royal College of Physicians in London for the Fraud Conference 2024. Hosted by R3 along with the Fraud Advisory Panel and INSOL Europe, the event covered a variety of hot topics in the fraud space including the rise of AI, the current tools on the market available to help tackle fraud, and an update from the Home Office on failure to prevent fraud guidance.

The penultimate session of the day focused on new fraud legislation, the Economic Crime and Corporate Transparency Act 2023 and the Online Safety Bill, with speakers debating the effectiveness of the legislation.

This was of particular interest, as R3 has continued to lobby for tighter reforms in the legislation, including removing the automatic strike-off procedure and replacing automatic strike-offs with compulsory liquidation.

Policy debate

In the last week of February, the Public Affairs team held its quarterly Policy Group meeting with attendees facing another packed agenda including updates on the state of the nation, discussions on R3’s ‘Future of the Profession’ project, and an update from R3’s Technical team.

Another topic of the meeting focused on local authority financial distress. With six local authorities declaring themselves effectively bankrupt since 2021, and the State of Local Government Finance report for 2024 uncovering that 9% of respondents said they are likely to declare effective bankruptcy within the next financial year, the urgency of addressing these concerns has become increasingly apparent. The group discussed both preventative measures and remediation strategies for instances of local authority distress.

R3 in the media

Our comments on the January insolvency statistics for England and Wales were quoted in a range of national, trade and regional publications in February, including the Times, Credit Connect, TRI Strategy, the Business Desk and BBP Media.

Media interest in R3’s analysis of business trends data also remained popular in February, with stories highlighting a rise in business start-ups in Yorkshire and Northern Ireland gaining coverage in the Yorkshire Post, Business Up North, the Irish News, and the Belfast Newsletter  and news of a drop in insolvency-related activity in the South East featuring in a range of publications including the Bournemouth Echo and the Business Magazine.