The Insolvency Service Annual Report and Accounts 2019-2020
Insolvency Service: Annual Report and Accounts 2019-2020
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In September 2019 I was asked to temporarily cover the Chief Executive role for the agency and was subsequently appointed on a permanent basis in December 2019. It is my privilege to report for the first time on the Insolvency Service’s strong performance over the last year.
21 March 2020 marked the 30th anniversary of the Insolvency Service as an agency. Over the last three decades, the agency has changed considerably, from taking on new functions, such as the Redundancy Payments Service, to introducing major reforms to the insolvency regime, such as Debt Relief Orders in 2009. Throughout the many changes over the last thirty years, the core objectives of the Insolvency Service have consistently been the delivery of economic confidence by supporting those in financial distress, tackling financial wrongdoing and maximising returns to creditors.
The end of the reporting year was dominated by the start of the Coronavirus (COVID-19) pandemic which has impacted the lives of everybody in the UK. I am particularly proud of the way the agency has responded to the crisis, by continuing to deliver its essential public services with professionalism and dedication throughout the disruption. All our offices were closed following the lockdown advice, but the investments we had previously made in our IT infrastructure ensured we were able to transition smoothly and effectively to home working.
At the time of publication, we are continuing to work flexibly, adhering to the government’s guidance on safe working. In addition, we have progressed a major package of new legislation through Parliament which will provide innovative options for business rescue to support the country’s economic recovery from the pandemic.
Looking back over the reporting period, the agency handled some of the largest and most complex cases in its history. British Steel entered compulsory liquidation in May 2019 and the Official Receiver was appointed liquidator. After one attempted sale of the business fell through in October 2019, the Official Receiver and his Special Manager team secured a sale in March 2020, saving around 3,200 jobs and securing steel production in Scunthorpe and other UK locations.
The Official Receiver was also appointed liquidator over the Thomas Cook group of companies when it collapsed in September 2019, leading to the largest peacetime repatriation. Around 6,000 of Thomas Cook’s staff were made redundant within the first few days of the liquidation and our Redundancy Payments Service worked tirelessly to pay out almost £30 million in redundancy payments within the first two weeks of the liquidation. The Official Receiver was later able to agree a sale of Thomas Cook’s retail business, which secured the re-employment of over 2,000 former Thomas Cook employees.
Our investigation, enforcement and legal teams handled a number of notable cases. These included securing disqualification undertakings for 5 and 10 years in respect of former directors of BHS, and the successful prosecution of seven offenders in a substantial case of fraud and dishonesty following “Operation Aldgate”, resulting in custodial sentences of up to 6 and a half years. By the end of the year, the agency had obtained the highest number of director disqualification outcomes since 2013-14. And in 2019, former tennis star, Boris Becker, agreed to extend his bankruptcy restrictions by 12 years when he accepted a Bankruptcy Restrictions Undertaking.
Against this backdrop of record activity, the agency continued to progress towards its new operating model. This included maximising efficiencies following the introduction of a new case management system for processing redundancy claims and the roll out of new equipment and applications to all staff.
Initial teething problems with the redundancy payments case management system impacted on the speed of processing for claims at the start of the year. But once these were resolved we were able to deliver a marked increase in performance for the second half of the year. As a result of the benefits of the new case management system, the claims in Thomas Cook were processed on average within 4 days. 2019 also saw some big changes in our estates which culminated in the move of our London headquarters from Victoria to Stratford.
The agency also completed the initial phase for a new Breathing Space scheme towards the end of 2019. This will be a valuable new option available to vulnerable people in problem debt, providing a breathing space from creditor action for 60 days, during which time people can receive professional debt advice and pursue options to deal with their financial situation. The scheme is on target to be introduced in 2021.
We will undoubtedly face new challenges in the coming year as the economy emerges from the impact of COVID-19. However, the professionalism, skill and dedication of the staff in the agency gives me great confidence that we will meet these challenges head on.
Dean Beale
Chief Executive
Last updated 28 February 2023 + show all updates
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A correction has been made to the Annual Report 2019-20 document where a case study on Young Forever Limited was incorrectly referred to as Forever Young Limited.
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The accounts ODS document has been updated to reflect previous changes to the published Annual Report and Accounts. These changes are: * Note 1(k) sentence starting “Within the admin fees recognised,” updated figure from £84m to £91m * Note 1(q) removal of final sentence starting “In summary…” * Note 4 first footnote updated figure from £84m to £91m * Note 9 final paragraph updated figure from £84m to £91m * Note 10 correction of reference from Note (q) to Note (r) These changes do not impact on the HTML, and print versions that included the above at time of publication.
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Update to correct table data relating the pension benefits. The data has been updated and reads: Sarah Albon - Pension benefits 2019-20: 12 / 2018-19: 29 Dean Beale - Pension benefits 2019-20: 74 / 2018-19: 67
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First published.