Cuts see Insolvency Service probes plummet by 40%

The number of investigations launched by the Insolvency Service has fallen nearly 40% – a drop that the agency has blamed on budget cuts of 11%.

The services’s full-year accounts for the 12 months to April 2011 show it’s company investigations unit launched 180 cases in this period, a decrease of 39% from the 295 launched in 2009-2010.

The news follows concerns that a lack of resources will reduce the service’s capacity to investigate rogue company directors.

The accounts state: “This decrease is as a consequence of 11% cuts which reduced the amount available to outsource some investigation work, and the replacing of experienced non permanent workers with permanent staff from other areas of the service last autumn.

“Towards the end of the financial year, the impending departure of a number of investigators under a voluntary exit scheme also impacted on the number of cases commenced.”

According to the accounts, the service received 4,852 complaints about limited companies in the past year. Some 564 came during the first quarter of 2011, from the Department of Business, Innovation and Skills and the Serious Organised Crime Agency.

Although only 180 investigations were started on the back of these complaints, the accounts include details of convictions from older cases. They show that 166 defendants received convictions for corporate and personal insolvency related offences and 99 defendants were dealt custodial sentences of up to six years.

Some 53 disqualification orders were dealt out to directors, ranging from 12 months to the maximum 15 years, while 15 confiscation orders were made for items worth more than £217,000.

This article is from the “Insolvency Today” publication. Click here for link to the website

Link to the Insolvency Service website