The Insolvency Service has swung the axe on 50 front line official receiver investigators in a move which is “tantamount to legalising corporate theft”, according to sources.
The mass job cut will mean that every regional office across the country will feel the loss of around three insolvency investigators.
It is believed the majority of investigators who have been made redundant were working within the corporate division.
Official Receivers typically investigate an average of 30-40 cases at any one time, and at the time of going to press no contingency plans had been drawn up by the Insolvency Service regarding the work load and cases under investigation by former staff.
One source familiar with the developments said: “Insolvency practitioners have complained before that the Insolvency Service wasn’t doing enough director disqualifications – and these actions will worsen the situation.
“Making these front-line cuts is tantamount to legalising corporate theft.”
Recent investigations by the Insolvency Service have led to a director of a failed solar company being disqualified for nine years after it was found he had run the business in a way that was detrimental to creditors and consumers.
Richard Curtin, special counsel at law firm Faegre & Benson, said: "These cuts are being made at a time which is going to be so busy for insolvency investigators and will mean delinquent directors will get away with it. In these austere times, insolvency isn't a sexy division for the government to pump money into."
The Department of Business (BIS) was the hardest hit by chancellor George Osborne’s “unavoidable” budget in May. Vince Cable’s department has been told it must make £636m of efficiency savings to tackle Britain’s ballooning deficit as the country enters an age of austerity. The 3,000 staff at BIS have already been informed of a voluntary redundancy programme to cut part of the £38m of administrative costs as ordered by Osborne. According to reports, up to one in four staff in some BIS operations are at risk.
The Insolvency Service is charged with the role to administer the current insolvency regime and investigate all compulsory liquidations and bankruptcies through the Official Receiver to establish why they became insolvent.
The Insolvency Service declined to comment on the redundancies and said it “was too early to talk specifics.”
Filed under: BUSINESS NEWS
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