Insolvency Service (Hansard, 28 June 1994)

§ Mr. Austin Mitchell
To ask the President of the Board of Trade what targets he has set the Insolvency Service for closure of files(a) before 8 July and (b) for 1994.

§ Mr. Neil Hamilton
The majority of the Department's agencies are set annual targets. For 1994–95 the Insolvency Service has been set the target of reducing the number of its open cases to a level equivalent to approximately 12 months' input. This will result in the closure of 53,000 cases.

§ Mr. Austin Mitchell
To ask the President of the Board of Trade what assessment he has made of the effect of the increased number of insolvency completions on the detection of fraud and the prosecution and disqualification of delinquent company directors.

§ Mr. Neil Hamilton
Although some specialist resource will be diverted to assist the process of increased case completions, the Insolvency Service still anticipates that it will devote some 25 per cent. more manpower resource to prosecution and disqualification activity in 1994–95 then in 1993–94.

§ Mr. Austin Mitchell
To ask the President of the Board of Trade how much extra funding is being allocated to the Insolvency Service in the current year for(a) file closure and (b) fraud investigation.

§ Mr. Neil Hamilton
A total of £1.831 million has been allocated to the service from my Department's running 461W costs for 1994–95 to fund the additional work required to meet the case closure target of 53,000. The additional allocation provided in relation to fraud investigation for 1994–95 is £1 million.

§ Mr. Austin Mitchell
To ask the President of the Board of Trade what is the cost to the Insolvency Service of employing private sector secondees.

§ Mr. Neil Hamilton
For 1994–95 the estimated cost of employing private sector secondees and/or of engaging other private sector resources on a short-term basis will be £1.12 million.

§ Mr. Austin Mitchell
To ask the President of the Board of Trade what is his policy on the investigation by the Insolvency Service of potential offences or possible areas of investigation when reviewing whether insolvencies can be completed; and what are the reasons for this policy.

§ Mr. Neil Hamilton
The investigation of an insolvency or the consideration of possible offences can be and often is conducted independently of its administration. Where, in reviewing a case with a view to the conclusion of the administration, matters are identified which, prima facie, require further investigation those matters receive full consideration.

§ Mr. Austin Mitchell
To ask the President of the Board of Trade if he will make a statement on his assessment of how the Insolvency Service's recent investigation in the local office information system will assist(a) the mechanical processing work of the service and (b) the investigation work of the service.

§ Mr. Neil Hamilton
The Insolvency Service's investment in LOIS—local office information system—links a relational database to office automation software. The system assists official receivers in streamlining case administration, particularly in the document production area; and it will provide management with additional information relevant to the allocation of resources and monitoring of performance.

§ Mr. Austin Mitchell
To ask the President of the Board of Trade what effect increases in the rate of closure of files by the Insolvency Service will have on checks for fraud and prosecution of fraudulent directors.

§ Mr. Neil Hamilton
None. The additional cases to be closed in 1994–95 will already have been vetted for any requirement for further investigation.

§ Mr. Austin Mitchell
To ask the President of the Board of Trade how many private sector secondees are currently on loan to the Insolvency Service; and what work they are doing.

§ Mr. Neil Hamilton
A total of five private secondees are currently in post in the Insolvency Service and a further two are due to start on 4 July 1994. Three of the secondees are working in the disqualification unit on disqualification matters and two are working in official receivers' offices assisting examiners. The two secondees due to start on 4 July 1994 will be working in the disqualification unit on disqualification matters.

§ Mr. Austin Mitchell
To ask the President of the Board of Trade which Insolvency Service targets are affected by the completion of extra insolvencies in the current financial year; and to what extent.
462W

§ Mr. Neil Hamilton
None.

§ Mr. Austin Mitchell
To ask the President of the Board of Trade what considerations underlie the allocation of time in the Insolvency Service between mechanical processing work and core investigation functions.

§ Mr. Neil Hamilton
A minimum amount of routine administration work has to be done on each insolvency. The Insolvency Service seeks to devote the minimum level of resource to such work consistent with a proper discharge of official receivers' statutory duty so that it can maximise the resource devoted to its investigative role.

§ Mr. Austin Mitchell
To ask the President of the Board of Trade what steps have been taken to implement the recommendations of the 18th report of 1993–94 from the Public Accounts Committee on the Insolvency Service executive agency and company director disqualifications.

§ Mr. Neil Hamilton
The Government's response to the 18th report of the Committee of Public Accounts on the Insolvency Service executive agency and company director disqualifications will be published in due course.

§ Mr. Austin Mitchell
To ask the President of the Board of Trade how many officials have been to the Insolvency Service on six-month contracts since the establishment of the service.

§ Mr. Neil Hamilton
None.

§ Mr. Austin Mitchell
To ask the President of the Board of Trade how many disqualification proceedings are expected to be issued in the current financial year, identifying those proceedings initiated by insolvency practitioners and those by the Insolvency Service.

§ Mr. Neil Hamilton
There is no target for the number of disqualification proceedings to be issued. On present information, it would appear likely that in 1994–95 between 750 and 800 disqualification proceedings will be commenced, of which between 60 per cent. and 70 per cent. are likely to relate to cases reported on by insolvency practitioners while the remainder will relate to cases dealt with by official receivers.

§ Mr. Austin Mitchell
To ask the President of the Board of Trade what plans he has to increase the prosecution rate for inadequate accounting records by the Insolvency Service.

§ Mr. Neil Hamilton
The allocation and deployment of additional investigative resources will enable the Insolvency Service to increase the number of reports produced identifying criminal offences, including those relating to a failure to maintain adequate accounting records.