The Insolvency Service Annual Report and Accounts 2021-2022
Insolvency Service Annual Report and Accounts 2021-2022
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Chief Executive’s foreword
As the Government Agency responsible for the country’s insolvency framework, the Insolvency Service has a key role to play in supporting those experiencing financial difficulty. Although the country has now emerged from the COVID-19 pandemic, 2021-22 started with continuing pandemic related restrictions. Since then, there have been new economic challenges with significant rises to the cost of living, instability in the energy markets and global events impacting the longer-term economic outlook.
This report sets out the good progress we have made during the last year, supporting our customers and ensuring that we have an Agency fit for the future in what has been a challenging environment. 2021-22 was the first full year delivering our five-year strategy and in May 2021 we successfully launched Breathing Space. This new scheme allows people in financial distress to obtain a period of protection from enforcement action by their creditors. By the end of the year, we had received over 58,400 successful applications, which included over 900 people in a mental health crisis situation. In addition, extending the monetary eligibility criteria to obtain a debt relief order has enabled an additional 6,500 of the most financially vulnerable individuals to obtain relief from their debts, with over 22,600 orders made during the year.
The year also saw us introduce new guidance for directors of micro and small businesses to help identify the early warning signs of financial trouble, with signposting for where to get advice and information about their responsibilities as directors to help prevent financial misconduct.
Where there is evidence of misconduct or breaches of the law, undermining confidence in business, we have taken action to prevent further harm. Over the year we have removed 802 unfit directors from the marketplace and achieved 119 successful criminal convictions. We have increased the number of investigations into live companies from 143 last year to 167 this year and secured 304 bankruptcy restriction orders and undertakings. We continue to investigate a significant number of cases where there has been misconduct in relation to government backed COVID‑19 financial support schemes including Bounce Back Loans, and by the year end we had secured 141 director disqualifications and 58 bankruptcy restrictions.
Over the last two years we have seen decreases in business insolvencies, likely to be the result of government support measures during the pandemic and widespread creditor forbearance as businesses faced unprecedented trading challenges. The number of cases handled by Official Receivers fell by 27% and the number of claims to the Redundancy Payments Service also dropped from 96,219 last year to 44,895 this year. Next year we expect to see an increase in company insolvencies as temporary support measures come to an end and the insolvency regime returns to pre-pandemic operating.
To deliver our services more effectively and efficiently in the future we finalised our long-term estate plans and have now begun a programme to transform our workplaces, providing the right locations for our customers, with modern, collaborative workspaces for our people, supporting the long-term ambitions set out in the government’s Levelling Up and Places for Growth strategies.
In 2021 we welcomed four new non-executive members including a new chair, Mark Austen, to our Insolvency Service Board. The Board is responsible for the long-term success of the Agency and its new members have brought significant experience from their respective fields, providing valuable support and guidance to the Executive Leadership Team. I would also like to recognise the immense contribution and support of the outgoing board members whose hard work, dedication and expertise over the past few years has supported us to consistently deliver our objectives.
Overall, the Agency produced a solid performance in 2021-22 and I am very proud of how our people delivered for our customers and other stakeholders through such difficult times.
Looking ahead we will continue to build on what we have learned over the last 12 months to ensure the Agency continues to grow and improve its service delivery, delivering economic confidence for businesses and citizens and supporting the country’s economic growth.
Dean Beale - Chief Executive
How we performed
Supporting those in financial distress
8,467 New insolvency cases handled by our Official Receivers
22,601 Debt Relief Orders
6,669 Online Debtor bankruptcy orders
58,476 Successful Breathing Space applications including 908 people in a mental health crisis situation
1,089 Creditor petition bankruptcies
44,895 Redundancy payment claims
712 Compulsory Liquidations
12 Average calendar days taken to action redundancy payments
Tackling financial wrongdoing
119 Criminal prosecutions
167 Live Company Investigations
802 Directors disqualified for misconduct
6% Directors disqualified for 10 years or more
316 Bankruptcy restrictions
Maximising returns to creditors
£42.7m Dividends returned to creditors and debtors
95% Report to Creditors issued within 15 days of an attended interview
Customer satisfaction
84% Customers satisfied with our work