Suggestion R3 has 'rolled over' in face of government pressure is false, incoming president Andrew Tate tells Accountancy Age
ANDREW TATE is a man on a mission.
The newly appointed president of insolvency trade body R3 is full of pugnacious zeal as he seeks to champion the wider cause of the profession, especially the smaller practitioners, many of who are being deluged by a wave of new legislation.
And he’s vowed to fight their corner and ensure their voice “is not lost”.
Having amassed 25 years’ experience dealing with all things restructuring and insolvency, Tate, who heads up Kreston Reeves’ recovery and restructuring team and formally took up the role at the end of April, is well placed to take up the baton from outgoing president Phillip Sykes.
Tate, a licensed insolvency practitioner since 2000, says he’s “very keen to reflect the fact that small practitioners are feeling embattled at the moment” because of all the government changes coming through.
“There’s a lot more coming through, and there are people out there who might think R3 has rolled over and just had all these changes put on us without fighting them. And actually that’s not the case at all.”
He admits that “getting the message out to the industry and telling people what we have been doing to fight for them is really difficult to get across”, so “people get the wrong impression that we’re not fighting for them, whereas actually really we are”.
“I personally have been in front of two bill committees and we’ve talked to MPs about it, so we do a lot and it’s really unfortunate people feel so blind-sided by all the new legislation that’s coming through, that they lose sight of that.
“We try to support the small practices and it’s something that I will be talking to the Insolvency Service and MPs about to make sure that the voice of the small practitioner is not lost, because it is quite lonely being out there as a small practitioner.”
Essentially, Tate has three key prongs to his manifetso – helping small firms, dealing with “the swathe of new legislation that’s coming in and allowing that to bed down before we compound it with further changes” and promoting the skill set of the professions that make up the insolvency market.
Tate is keen to make the government sit up and listen to the concerns of the insolvency profession regarding many of the changes that impact on formal insolvency procedures
He’s adamant that he’ll strive to ensure such changes ideally enhance, rather than emasculate what the UK’s insolvency regime and empower – rather than impede – insolvency practitioners to help rescue businesses and under-threat jobs, while simultaneously returning money to creditors, and helping indebted individuals recover what is due to them.
“Insolvency practitioners are now having to deal with fees in different ways and there’s a lot more legislation that’s going to hit us during the later course of this year, and that’s going to be quite a change in the structure of our rule book and how insolvency practitioners deal with things.”
Tate, who previously served for three years as chairman of R3’s smaller practices group which supports the needs of smaller practice members and sits on R3’s Council, cites the example of changes to the initial physical creditor meeting when a company goes under.
“Whether it goes into liquidation or administration there is generally a meeting of creditors where people can ask questions, they can make their views known, they can give intelligence to the insolvency practitioner. And one of the things that we’re disappointed about is that the government is bringing in legislation which will make it the norm not to have a meeting unless creditors want it.
So despite R3 lobbying quite hard for it, the government essentially ignored them, albeit it did manage to extract a compromise from the original, more draconian proposal, as Tate explains.
“The concern originally was that having a creditor meeting in every situation was incurring costs such as room hire when maybe no creditors would come along. The initial view was that you should just do away with that altogether and simply have meetings by correspondence or possibly telephone meetings later on. And we fought for that very hard and we eventually got this compromise where you could get, what we call it the three tens. What that means is a certain proportion of creditors – 10% – can request that a meeting takes place.
And with the new rules expected to kick in in October, R3 has vowed to monitor how it works, press the Insolvency Service to do the same ask members to feedback on situations where they have “really missed that initial meeting or perhaps they’ve been frustrated because they’ve tried to get creditors to engage with them by calling a meeting and they’re not able to do so”.
Tate and R3 will also look to encourage HMRC to set up a specialist insolvency team to help both the industry and the taxman. OFT research indicates that at least 25% of all unsecured debt is owed to the revenue. Yet many IP’s express huge frustration at the lack of communication with – and unhelpfulness from – the government department.
“We could save more jobs and we could do our job even better if we could actually have that interaction with them, and do it quickly.”
And as HMRC is “looking to reorganise itself into 13 regional hubs anyway, we think there is an appetite to look at it”, says Tate.