IPs tackle Jobcentre redundancy plan

It’s a sign of the times. Insolvency practitioners are facing a deluge of work because of the recession but now they must also tell the Jobcentre if they have plans to make redundancies.

An announcement by the Jobcentre, Insolvency Service and insolvency trade body R3 revealed they have signed a memorandum of understanding to advise Jobcentres as soon as possible when IPs are planning redundancies during an administration or restructuring. But the move has lead to questions of practicality.

There are critics who believe the new demands will add to the mounting pile of priorities on the desks of hard-pressed IPs.

“The practicalities might be problematic,” warns David Kerr, the chief executive of the Insolvency Practitioners Association.

The biggest problem being just when the Jobcentres should be informed and how “confidential” the information should remain. They need to be told early, but not prematurely so that a panic starts among workers in the company in trouble. News leaking out too soon may pose a real threat to the successful completion of an administration.

IPs expect to work with the newly formed Rapid Response Service of the Jobcentre network, but this week its officials declined to comment on just how the service will coordinate with insolvency professionals, and whether resources will be increased.

Peter Sargent, president of R3, said IPs need to practice “trial and error” even though concern has emerged in the profession over the issue of confidentiality. “It will be a case of a judgement call by the IP to let the Jobcentre know what’s going on,” he said.

“We have to be organised to do our job and I believe the pressure is on the IP to get on with other things,” he added.

The memorandum will not be enforced and as yet Sargent, who spearheaded the agreement, is unsure of any plans to make it part of the profession’s ethical code.

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