Championing public sector collaboration

19 August 2025

Established in May 2024, R3’s Public Sector Faculty provides a forum for discussion between the insolvency profession and public sector organisations, ranging from law enforcement and local government to regulators and HMRC. 

The faculty is led by Malcolm Weir, R3 Council member and former Director of Restructuring & Insolvency at the Pension Protection Fund. According to Malcolm, “the faculty is a great opportunity to promote the work of the profession. The powers that Insolvency Practitioners (IPs) hold, and the experience that they have in dealing with insolvent companies and investigating the activities of directors, put them in a unique position to support work undertaken across the public sector.” 

The faculty has so far held three meetings covering different topics.

Tackling Data Sharing and Fraud: Insights from the ICO Session

At the first session, Kerry Smith, Investigations Group Manager at the Information Commissioners Office (ICO), delivered a presentation on how IPs aided the enforcement of Privacy and Electronic Communications Regulations (PECR) breaches. Examples included disqualifying directors involved in nuisance marketing and assisting police in a complex money laundering investigation in South Wales.

Key themes of the meeting included the need for improved data sharing among agencies and IPs, with suggestions such as a centralised contact hub to streamline reporting and communication. Law enforcement stressed the value of IPs in both criminal and civil financial recovery, particularly under the Proceeds of Crime Act 2022.

Discussions amongst members also addressed challenges with phoenix companies, the role of director disqualification, and the political and institutional under-prioritisation of fraud. Participants advocated for broader recognition of IPs’ potential in both fraud and non-fraud cases, proposing “wrongdoing” as a more inclusive term.

Members ultimately concluded with calls for policy engagement, especially around data reform, underlining the Public Sector Faculty’s role as a key platform for future collaboration.

Business Rates and Insolvency: Lessons from Westminster

At the second meeting, representatives from Westminster City Council, Capita and an R3 member firm presented their collaborative work around the recovery of unpaid business rates. Capita has a contract with Westminster to assist with the collection of business rates, and IPs liaises closely with both when the entity in rateable occupation enters an insolvency process. 

In 2023, the member firm assisted Westminster City Council with insolvency referrals, spanning Creditors’ Voluntary Liquidations, Compulsory Liquidations, Administrations, and other procedures. The firm also handles historic insolvency matters and ad hoc support.

Key issues faced by Westminster City Council include persistent non-payment of business rates, use of avoidance schemes (e.g. snail farms claiming agricultural exemptions), phoenix companies, untraceable directors, and problematic business types such as souvenir and American candy shops on Oxford Street.

Case studies highlighted creative rate avoidance tactics, such as repurposing office buildings into nominal “snail farms,” and investigations into sweet shops suspected of business rates evasion and selling illegal goods.

Combating Phoenixism: A Joint Public Sector Approach

The third meeting took place in June and featured another joint presentation, this time from HMRC, Companies House and the Insolvency Service. The three organisations outlined how they were tackling the issue of phoenixism, which is when the same business or directors trade successively through a series of companies which liquidate or dissolve, leaving debts unpaid.

Discussions touched on several different aspects of the new strategy. This included the exact definition of phoenixism (when the same business or directors trade successively through a series of companies which liquidate or dissolve, leaving debts unpaid), and how to tackle it without harming legitimate entrepreneurs. The enforcement of the director disqualification regime through identity checks was also an important project for Companies House and one that should make it easier to spot bad behaviour. 

HMRC highlighted how tackling it would ensure returns to other creditors, not just themselves. The government's desire to do something about this issue has allowed them to breakdown the silos between departments.  

A Growing Network of Collaboration

Over the course of its first three meetings, the Faculty has grown to encompass several different organisations. Aside from those mentioned above, attendees have included representatives from the Financial Conduct Authority, National Crime Agency, City of London Police, National Trading Standards and CIFAS, the UK’s nonprofit fraud prevention service.  

R3 members are drawn from across the organisation, particularly the Fraud and Asset Recovery Group.

Malcolm commented that “public sector bodies attending the meetings are seeing distinct advantage of collaboration and idea sharing that the Faculty offers and I encourage other public sector bodies to attend.” 

If you would like to get involved, please contact Lyle Horne at [email protected].