Corporate report

The Insolvency Service public body review outcome

Published 27 July 2023

1. Background of the Insolvency Service

The Insolvency Service is an Executive Agency responsible for administering certain personal and corporate insolvencies via the Official Receiver, carrying out enforcement work relating to misconduct in insolvency and disqualifying unfit directors, operating the Redundancy Payments Service on behalf of HMRC and advising DBT ministers and other government agencies on insolvency related issues.

2. Purpose of the review

The review aimed to ensure that the Insolvency Service is:

• delivering with a clear purpose which remains relevant and is appropriately classified
• on track to be effective, efficient and aligned to the government’s priorities
• well governed and properly accountable for what it does

3. Recommendations and conclusions

A stage 1 review concluded that the Insolvency Service is in good health. It has plans and processes in place to meet minimum requirements for an arm’s length body (ALB).

This stage 1 review did not indicate the need for a full-scale review of the Insolvency Service at this time.

A total of 7 recommendations were identified, to improve efficiency, governance and accountability processes. The recommendations aim to ensure that the Insolvency Service and DBT continue to maintain a strong sponsorship arrangement.

3.1 Efficiency

1. The DBT policy sponsor team should continue to support the Insolvency Service in adopting Shared Services across HR & Payroll functions, through utilisation of the Matrix programme as it develops. In addition, the policy sponsor team and Insolvency Service should continue to work together in supporting the Insolvency Service’s drive to seek out further opportunities for back-office simplification that can create efficiencies and savings.

3.2 Governance

2. When reporting annual progress against the Insolvency Service five-year Strategic Business Plan, relevant key performance indicators and SMART metrics should be utilised, ensuring this reporting uses specific measurable performance indicators.

3. The Insolvency Service to finalise work to rationalise its income model fee structures, as highlighted previously in the National Audit Office audit 2019/20 management points, to prioritise capital simplicity.

4. Formal non-executive board member appraisals should be conducted annually by the Chair of the Insolvency Service, following the Cabinet Office ALB Non-Executive Director Appraisal Principles. Full written record should be kept of the exercise and outcome of the evaluation should be discussed with the senior policy sponsor.

5. The updated Insolvency Service Framework Document and the Register of Interests should be published as a matter of urgency and by no later than 31 December 2022. This recommendation was successfully completed on 13 December 2022 when both documents were published on the agency’s website.

3.3 Accountability

6. DBT should evaluate and consider increasing the resource available to perform the sponsorship team responsibilities, to ensure sufficient support, recognising the size of the Insolvency Service, the raft of new investigatory powers in the pipeline under the Economic Crime and Corporate Transparency Bill and increased requirements pursuant to the Arm’s Length Body Sponsorship Code of Good Practice.

7. The priorities for the Insolvency Service should be set out in an annual chair’s letter issued by the responsible minister (or PAO if delegated), in line with the Arm’s Length Body Sponsorship Code of Good Practice.