More than 400 jobs go at Insolvency Service

MORE THAN 400 jobs are to go at a division of the Insolvency Service.

A spokesman from the Public and Commercial Services Union (PCS) told Accountancy Age 440 jobs would go from Official Receiver (OR) offices nationwide. But the government body has been inundated with 680 applications for voluntary redundancy since the announcement.

At the end of March 2010, the Insolvency Service employed 3,132 people including permanent, casual and agency workers.

The PCS spokesman said morale is low in OR offices, which has suffered a high level of sick or absent employees over the last year.

There are 36 OR offices around the country, which deal with the majority of bankruptcies and some corporate insolvency cases.

The government department believes bankruptcies will decline this year. However, personal insolvency experts said they expect bankruptcies to remain at record levels, as public sector cuts take effect.

A spokesman at the Insolvency Service said it had “launched a Voluntary Exit Scheme (VES) for its staff. Applications have been invited from all staff outside the Senior Civil Service with an expectation that we will release around 400 staff.

“The scheme has become necessary principally because of further falls in the levels of new bankruptcies, which means that we must reduce our costs to reflect falling income from insolvency case administration fees. We hope to avoid any redundancies as far as possible.”

The deadline for employees to submit a voluntary redundancy application ended earlier this week. The maximum redundancy payout for an employee would be two years’ wages.

The PCS is meeting with the Insolvency Service today to discuss redundancy packages and how the OR will function going forward.

“One concern we have is that there is a danger of cutting staff levels to such an extent that the agency cannot fulfil its purpose,” said the PCS spokesman.