Insolvency Service system upgrade will hit creditors

Creditors could find themselves more than £19m out of pocket while the
Insolvency Service shuts its IT system down for ten days.

Insolvency practitioners will be unable to request payments, on behalf of
creditors, from the Official Receivers’ offices, as the government agency
upgrades its technology system in an £82m project.

Insolvency practitioners have labelled the move to take the old system
completely offline while upgrading as “bonkers”.

Generally, most IT integration projects run old and new system concurrently.
This ensures a smooth handover and mitigates for any delays which may occur if
the new system struggles or fails to meet its deadline.

“You would never run a new system with the old one going offline in case
there are any problems,” said Philip Long, partner at PKF.

The government agency had given insolvency practitioners “as much notice as
possible”, equating to around six weeks, and said it has made provisions for the
extra payments required for creditors when the upgrade is completed.

“Generally there are few transactions on an individual insolvency account in
any week unless, for example, a dividend is being paid to a large number of
creditors,” a spokeswoman said.

“We anticipate that practitioners will be able to plan their financial
matters around the down time so that it has little or no effect.”

The Insolvency Service expects all its major online based services, including
insolvency notices sent to the London Gazette and support services, to be
disrupted during this period.

The IT overhaul is referred to as the Enabling the Future project and is
expected to be fully integrated by 31 March 2015 and to deliver estimated
benefits of £122m annually.
Although the coalition government has announced budget cuts to IT projects, the
Insolvency Service was given the green light.

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