The Insolvency Working Party’s report is a last-gasp attempt to preserve the failed system of Chaps regulating Chaps. That’s hardly surprising. The working party is dominated by Chaps and their vested interests.
It carefully excluded consumers and stakeholders from its deliberations.
Its main concern is to preserve the privileges and powers of the seven Recognised Professional Bodies (RPBs). They regulate only 1,800 insolvency practitioners, all of whom enjoy a state-guaranteed monopoly without any effective control or accountability. The working party’s remit was to keep it that way.
So the report is an exercise in public relations. It fails to provide any statistics about fees collected by the corporate undertakers, the number of jobs rescued or lost, or practitioners’ conflicts of interests.
There is no information about the number of complaints, the failures of the RPBs to act over them, or the time taken to investigate them. There is not even any suggestion that practitioners should be required to publish worthwhile information and no proposal to have the RPBs and practitioners owe a ‘duty of care’ to individual stakeholders affected by their actions.
All we have is a load of rhetoric about serving ‘the public interest’ but with no indication of exactly how they serve it or even take it into account.
I’ve said it before and I’ll say it again: only independent regulation can now restore public confidence in insolvency as in other services.
We need durable structure commanding public respect not a puncture repair kit for a bankrupt penny-farthing.
The process of regulation must be independent of the established vested interests of the accountancy and law firms and their trade associations.
This principle can only be achieved by setting up a single ‘new body’ to be responsible for accrediting, licensing, monitoring and disciplining all insolvency practitioners. That body should report to the Department of Trade and Industry and the Commons Select Committee but be independent of both. Only such a body can now command real public confidence.
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