A research update on corporate insolvency policy and an opportunity to share your views on COVID-19’s impact on the insolvency and restructuring profession

Recognising the pace of regulatory developments within insolvency amidst a global pandemic and lockdown restrictions, researchers at the University of Glasgow and Insolvency Support Services teamed up to conduct survey-based research across the UK-wide insolvency profession. Our first survey, issued in December 2020, focused upon specific corporate insolvency policy areas and the effects of COVID-19 on business. Our second survey explores issues relating to the insolvency profession, including career and practice management.

Amongst our most significant results from survey one, respondents anticipate that several factors are likely to trigger a rise in corporate insolvency case numbers this year. These include the phasing out of the furlough scheme; continuation of COVID-19 restrictions; repayment demands for deferred VAT, CBILS and BBLs; removal of restrictions on the use of statutory demands and winding-up petitions; and even business leaders’ exhaustion (Figure 1).

Figure 1
In your opinion, how likely are the following factors to trigger directors to seek assistance and/or creditors to take action (assuming the COVID-19 restrictions are repealed)?

Triggers for corporate insolvency 2021

% respondents

According to global World Bank rankings, the UK corporate insolvency regime is currently ranked 14th. Although World Bank rankings are derived from a hypothetical case study, they do take into consideration the potential for rehabilitation and rescue options for distressed but essentially viable businesses. Of particular interest here, 64% of respondents in survey one consider that prospects for rescue within formal insolvency will decrease because of HMRC’s return to preferential status and further, only 1% of respondents believe HMRC is fully prepared for the increased level of engagement with the insolvency profession that is expected from being a preferential creditor (Figure 2). Together with the wide range of likely triggers identified by our survey results, the effects of COVID-19 will test the UK framework in real terms, and in particular, its ability to rescue businesses.

Figure 2
Do you think that HMRC is adequately prepared for the increased level of engagement with insolvency professionals that the return to preferential status will bring?

% respondents (%s do not add to 100% due to rounding)

With activity levels for insolvency professionals likely to increase in the short term, the profession will have to manage this increased and challenging workload alongside their own practice management issues. How well the insolvency profession manages creditor and public expectations will have an impact on the reputation and degree of trust in the profession. ‘Remote’ or ‘home’ working has become the norm for many of us, but without the necessary research and planning typically attached to such significant organisational change. Anecdotal and media sources suggest that some form of home-working and/or flexible working practices may persist into the future. Recognising the anticipated rise in workload and increased professional scrutiny, our second survey explores some of the key issues surrounding practice management, including staff resourcing and recruitment, technological resources, adaptability, and potential threats to the profession.

According to the latest statistics published by the Insolvency Service, there are just over 1,500 IPs in the UK, now licensed and authorised by four RPBs. The precise size of the wider insolvency profession is unknown, but statistics published by R3 in 2013-14 suggest around 12,000 people work in the profession. Although a relatively small profession, the regulation of insolvency practitioners continues to attract considerable political attention. Governmental regulatory review of the profession is underway, including the potential for a single insolvency regulator. The need to capture the opinions of the insolvency profession at this time is arguably critical. According to our survey one results, just under half of respondents (49%) support a single regulator, 34% do not and 16% either don’t know or have no opinion (Figure 3). We also find that of respondents in favour of a single regulator, 50% would prefer a new entity to be established.

Figure 3
Do you support the introduction of a Single Regulator?

% respondents (%s do not add to 100% due to rounding)

Our survey one respondent profile also confirms some measures of ‘heterogeneity’ within the insolvency profession, in terms of the size and type of organisation where insolvency professionals work. 67% of respondents work within specialist insolvency and restructuring firms and accounting practices (or professional services firms), but we also find significant numbers working in law practices, within academia and at the professional or regulatory bodies. In survey two, we explore this diversity further by considering how lockdown restrictions have impacted upon individual working practices (recognising the differential impacts of lockdown upon those with caring responsibilities and therefore potentially across gender and age categories, as well as across size and type of workplace setting) and career management across what appears to be a diverse and evolving profession.

 

Please take a few minutes to complete our second questionnaire. We look forward to sharing the results of this with you and an updated commentary on the results of our first survey in the Summer edition of R3’s  RECOVERY Magazine.

 

Yvonne Joyce BA (Hons), CA is Senior Lecturer in Accountancy at the University of Glasgow

This article first appeared in the April 2021 edition of RECOVERY News online and is reproduced with the permission of R3 and GTI Media.

Your views on COVID-19’s Impact on the UK Insolvency and Restructuring Profession

COVID-19's Impact on UK Insolvency and Restructuring

Having recently gathered views on policy-related matters and the corporate insolvency landscape, Insolvency Support Services and researchers at the University of Glasgow are now embarking on the second part of our research study.

One year on from the commencement of COVID-19 lockdown restrictions, our second survey examines:

  • The challenges presented by lockdown to working practices;
  • How firms have adapted and whether insolvency professionals feel the adaptations have worked;
  • The differential impacts of lockdown on different groups of people;
  • What lockdown will mean for the profession going forward.

We would be grateful if you could take a few minutes to complete this survey by Wednesday 21 April.

All participants will receive a summary of the findings and be entered into a prize draw for two chances to win an ISS Training webinar as well as a £50 voucher for an online retail store of the winners’ choice.

All responses will be treated confidentially and will go directly to Wallace Marketing, an independent consultancy we have commissioned to administer this study.

Many thanks in advance for participating.

Research Report – Corporate Insolvency and Restructuring: Current Policy Issues and Challenges

The insolvency profession faces almost constant regulatory and statutory change. Present times appear no different, with the return of HMRC to preferential status, potential for a single regulator, forthcoming Pre-Pack Regulations and a new Code of Ethics. Coupled with a global pandemic, Brexit and the ensuing increased demand for professional services and heightened media attention, the insolvency profession is working in eventful times.

Against this backdrop, the University of Glasgow and Insolvency Support Services conducted part one of a two-part survey among a representative sample of the insolvency profession.

Read the full research report, with all the findings and our commentary.

Summary of Key Research Results

Corporate Insolvencies

  • The top two triggers for a predicted rise in corporate insolvencies are the phasing out of the furlough scheme and the continuation of COVID-19 restrictions, with 94% and 86% of respondents respectively selecting these factors as likely or very likely.
  • Around four in five respondents believe a repayment demand for deferred VAT is likely or very likely to act as a trigger for a rise in corporate insolvencies.
  • The two sectors most badly affected by the pandemic so far are hospitality & leisure and retail, with 90% and 64% of respondents respectively identifying these sectors. Overall, 24 different sectors are mentioned by respondents, highlighting the wide-reaching consequences of lockdown and COVID-19 restrictions in the UK.
HMRC’s Preferential Status and Rescue
  • Only 1% of respondents believe HMRC is fully prepared for the increased level of engagement with the insolvency profession expected from being a preferential creditor.
  • 64% of respondents believe that prospects for rescue within formal insolvency will decrease because of HMRC’s return to preferential status, and that it will lead to a reduction in lending facilities and increased use of personal guarantees and fixed charges.
Single Regulator
  • Just under half of respondents (49%) support a single regulator, 34% do not and 16% either don’t know or have no opinion.
  • Of those in favour of a single regulator, 50% of respondents prefer a new entity to be established.
Pre-Pack Regulations 
  • We find support for the Regulations to provide a definition of a pre-pack (71%) and a definition of who can act as evaluator (94% agree or strongly agree).
  • Opinion on the proposed timescale of eight weeks for a substantial disposal to a connected party is divided between those who consider it too long (39%) and those who consider it the right amount of time (33%).
  • Of those who feel the eight-week period is too long, all respondents selected an option of four weeks or less.
  • The most popular choice for an evaluator is an IP. There is also strong support for the Pre-Pack Pool or someone with relevant experience.
  • 89% of respondents agree or strongly agree that an evaluator should be a member of a professional body.
  • A significant majority believe it is likely or very likely that sales to connected parties will be effected by a liquidator rather than by an administrator (88%), or directors will sell the business or assets to a connected party pre-insolvency (75%).
Code of Ethics
  • 72% of respondents have undertaken some training related to the revised Insolvency Code of Ethics. With the current spotlight on the insolvency profession, CPD in this area seems critical.
  • Only 34% of respondents believe the revised Code will improve standards within the profession.
Read the full research report, with all the findings and our commentary.
If you have any questions about this research, please contact us.

IPA Learning with ISS Training

ISS Training is principal training partner for the IPA and supporting their newly launched IPA Learning (IPAL) initiative. 

Our training partnerships are important to us, and so we are also thrilled to announce that we are the principal training partner for the IPA and supporting their newly launched IPA Learning (IPAL) initiative.

IPAL is the IPA’s new learning partnership, located primarily on the Learndash platform, that will allow it to provide members, IPs and their teams with training and learning opportunities in relation to current technical and regulatory issues.  Designed with a clear focus on the practical application of technical and regulatory change as it impacts on IPA members’ businesses, the various workshops will be an opportunity to interact with the IPA, inform and develop working practices across the profession, and engage with the views of a Regulated Professional Body.

We will be working with the IPA to deliver an up-to-date, quality training programme throughout the year.

Hello to Louise Crawford

Louise Crawford

Louise Crawford has re-joined Insolvency Support Services as Manager with effect from 22 February, with a particular focus on outsourced client work.  Many of you know Louise and will be aware that she was our first ever employee, so it’s a real pleasure to welcome her back to the team.

Louise’s contact details are lc@insolvencysupportservices.com and her direct line is 0131 510 8641.  She is looking forward to working with you all again.

ISS Training launches CII training as ICAEW approved Partner in Learning: CII Certificate in Insolvency England & Wales 2021

Certificate in Insolvency

ISS Training has announced the launch of its new CII training as an ICAEW approved Partner in Learning.

The ICAEW’s Certificate in Insolvency (CII) is a flexible learning programme. Primarily developed for professionals based in England & Wales wanting to progress into a career in insolvency or strengthen their knowledge, the certificate equally benefits those whose work touches upon the E&W insolvency regime.

CII covers four key areas to ensure that students have a good grounding in the fundamentals of insolvency work and provides a basis for progression to a more advanced qualification in insolvency:

  • Legal and regulatory framework;
  • Principles of insolvency;
  • E&W corporate insolvency;
  • E&W personal insolvency.

Watch our short introductory video which explains how ISS Training’s CII course is structured, the format of the exam and how to book.

ICAEW does not impose any timeframe within which candidates must take the assessment. Study and assessments can therefore be planned to fit in with workload and business priorities. However, ICAEW does encourage candidates to attempt the assessment within no more than a few months of completing the modules, as the question banks are updated to reflect changes in legislation and insolvency guidance.

ISS Training’s modules have been designed to cover the CII examination syllabus in full and to offer essential practice on the principal areas in which candidates will be tested.  Participants are periodically tested in the course of their studies, and actively encouraged to ask questions and to discuss the syllabus with their tutor.

Comprehensive study aids for each module will be provided.

Certificate in Insolvency (CII) course options

There are two course options to choose from:

Our full course will be delivered using a combination of flexible online learning and regular live virtual classrooms, supported by periodic knowledge checking, individual feedback and a fully de-briefed mock examination.

Our independent learning course includes flexible online learning, supported by periodic knowledge checking and a marked mock examination.

Candidates following the full course can choose two pathways through the modules: a standard pathway or an accelerated pathway.

Click here for more information.

Book your place

Book online for the full course or the independent learning course

Email: courses@insolvencysupportservices.com

Call: 0845 601 7570

ISS Moodle School /  GoToWebinar

The ISS Moodle School is a widely-used virtual learning environment, and is accessible via your desktop or mobile device via the free Moodle app. This allows us to deliver your training materials in a variety of formats including video presentation, reference materials and online assessment (if applicable) in one place on one platform.  You will receive a registration for your ISS Moodle account the first time you enrol on an ISS course. All of your ISS course materials will be accessible to you on the Moodle platform for reference and/or download, and you can quickly check your CPD/E record.

Our online learning delivery in live classroom settings take place on the GoToWebinar platform. Our online virtual classroom sessions may be recorded and made available to all participating delegates for review purposes only. We will not release these recordings to any other person or organisation except in conjunction with the above purpose.

100% pass rate for CPI/CPPI Scotland and CPPI England & Wales

We are thrilled to report that all of ISS Training’s students for CPI/CPPI Scotland and CPPI England & Wales in 2020 have passed their exam, with just under half achieving a pass with merit.

Congratulations to all our candidates on their well-earned and well-deserved success! Their achievement is particularly impressive due to the unprecedented upheaval to the training and exam process brought about by the Covid-19 pandemic. In addition to adjusting admirably as we switched to online learning in the middle of the courses, our students all adapted well to the challenges of studying completely remotely and sitting the exams online. Well done everyone! We are very proud of you.

JIE, CPI and CPPI training

Is it your turn next? For full details of all our insolvency exam courses (JIE, CPI and CPPI), click here.

If you would like to discuss your options, please speak to us at any time on 0845 601 7570 or courses@insolvencysupportservices.com

CPPI Certificate of Proficiency in Personal Insolvency England & Wales 2021

CPPI provides an opportunity for recognition at a level equivalent to CPI for those working purely in the personal insolvency sector. The focus of this qualification is the statutory forms of personal insolvency and incorporates non-statutory debt solutions. On successful completion of the exam, candidates may apply for Affiliate Membership of the IPA (AIPA).

ISS Training’s modules have been designed to fully cover the E&W examination syllabus and to offer essential practice on the principal areas on which you will be tested. Participants are periodically tested and actively encouraged to ask questions and to discuss the syllabus with their tutor. Comprehensive study guides and course notes for each module will be provided.

Course Options for CPPI England & Wales 2021

There are two course options to choose from:

Our full course will be delivered using a combination of flexible online learning and live virtual classrooms, supported by periodic knowledge checking, individual feedback, a fully de-briefed mock examination and three full days of question practice.

Our independent learning course which includes flexible online learning, supported by periodic knowledge checking and a marked mock examination.

Click here for more information.

How to book

Book online

Email: courses@insolvencysupportservices.com

Call: 0845 601 7570

ISS Training wins top Education/Training Provider of the Year award

ISS Training, Insolvency Support Services’ training division, is thrilled to have won the Education/Training Provider of the Year category in the UK TRI (Turnaround, Restructuring and Insolvency) Awards 2020.

Eileen Maclean, Insolvency Support Services’ founding director, commented: “We’re over the moon to have won this TRI Award. It’s a fantastic way to round off what has been such a challenging year for many of us. I’m so proud of the hard work and team effort by my Insolvency Support Services colleagues, particularly in responding so well in trying circumstances this year. Thanks very much to the TRI Awards judging panel for recognising us. A huge thank you to all our clients, delegates and partners for your support. We know we could not have this success without you. We’re exceptionally grateful.”

These prestigious annual Awards, headline sponsored by Capa, recognise the range, variety and best practice of work undertaken by TRI professionals UK-wide.

Many congratulations to all the other TRI Awards 2020 winners, including EY, Manolete Partners, Howard Kennedy, Kirkland & Ellis, FTI Consulting, StepChange, ReSolve, Wilberforce Chambers, SIA Group, EY-Parthenon, Chamberlain & Co and The Insolvency Service / AlixPartners / KPMG Thomas Cook Team.

Your views on current policy issues and challenges in corporate insolvency and restructuring

 

Insolvency Support Services has teamed up with researchers at the University of Glasgow to undertake a two-part research study of policy-related matters impacting the insolvency sector and wider issues relating to the insolvency and restructuring profession.

In the first part of the research, we are gathering views on current policy-related matters and the corporate insolvency landscape. The second part, planned for Spring 2021, will examine the impact of Covid-19 on the profession, working practices, and policy.

We would be grateful if you could take a few minutes to complete our first survey. * Deadline for completion extended until 15 January 2021 *

All participants will receive a summary of the findings and be entered into a prize draw for the chance to win an ISS Training webinar as well as a £50 voucher for an online retail store of the winner’s choice.

All responses will be treated confidentially and will go directly to Wallace Marketing, an independent consultancy we have commissioned to administer this study.

Many thanks in advance for participating.