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Insolvency Service Staff Number Cut

6 July 2011

In Brief:

The body which investigates why companies have been made bankrupt has seen its staff cut by a third, the Government said. Junior business minister Ed Davey said the Insolvency Service had reduced its staff from 3,200 to 2,100 by May last year as the number of cases it handled fell from 78,000 in 2009-10 to around 50,000 this financial year.

FRP Advisory comments:

“Our main concern is simply how they are going to maintain their investigative role? How can you achieve the same output with fewer and fewer staff? – it just doesn’t add up.

“We’re also aware anecdotally that unsurprisingly morale is pretty low among remaining staff. The service is losing vast numbers of talented and experienced individuals and our worry is; what will happen when interest rates have to rise? There will be a tipping point where insolvencies spike because companies and individuals are suddenly unable to service their debt. The number of investigations carried out over the past financial year has already dropped compared to last – but it has been relatively quiet. We have real concerns about the service’s ability to investigate – its core function – as insolvencies rise.”

Comment from Philip Watkins, director at FRP Advisory LLP

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