An article in today's Accountancy Age has revealed that the Insolvency Service (which is the Government department that deals with individual bankruptcies and the liquidation of companies through the Courts) is shedding some 440 jobs from its Offical Receivers Offices around the UK.
This equates to a reduction of something like 14% of the OR's offices' staff. The reason being given is that the number of personal and corporate insolvencies being dealt with by the OR's offices is falling. However, the Insolvency Service's own statistics for Q3 2010 (the latest available) show total personal insolvencies have only reduced by 3.7% compared to Q3 2009.
Admittedly, the number of bankruptcies have actually fallen by 24% but the number of Debt Relief Orders have risen by 57%. DRO's still need to be dealt with by the OR's offices. With the Government's own spending cuts yet to take affect and the prospect of 500,000 public sector job cuts happening, this really seems short-sighted to me to be reducing the OR's staff levels at this stage. I suspect that the number of bankruptcies will increase during 2011/12 as many public sector workers will not be eligible for the simpler DRO process and will need to enter bankruptcy instead.
(If you need more information on Debt Relief Orders see our website under Useful Stuff/Insolvency Technical Briefs)
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