Cuts Watch #171: Insolvency Service investigations
The 11 per cent cut in the Insolvency Service’s budget will force a reduction in the number of investigations the Service carries out, warns Prospect – this means that fraudulent company Directors and failed companies will not be investigated and complaints from consumers will not be acted upon. The Insolvency Service investigates companies that have been wound up, establish why they became insolvent, deals with Directors abusing the laws on bankruptcy and runs a redundancy payments scheme for companies that have gone bust.
Prospect calculates that the cuts equate to nearly 200 directors not being disqualified (on average, each disqualification saves creditors £103,000 of future losses) and around 50 live companies not being investigated in response to complaints from the public. Prospect points out that the £3 million saved by these cuts will cost the public and honest businessmen over £20 million.