Business Recovery - Stephen Gale
Insolvency has been much in the news of late. The debate has, however, been conducted mainly by politicians but the voice of insolvency professionals and others with first-hand knowledge has not been much heard.
We have grown accustomed to the fact we live in a world where spin has taken the place of reasoned debate, and insolvency is no exception. This trend has been noticeable in the two recent consultations launched by government, one on personal insolvency and the other on company rescue.
Both are intensely political subjects, but both are viewed through a distorting political lens.
In one sense, the stated premises are unobjectionable, and even praiseworthy: enterprise should be encouraged, and viable businesses should not needlessly fail.
But the idea that the UK insolvency system somehow inhibits these aims and is in need of radical reform is more questionable.
The personal insolvency consultation contained some quite eccentric, and probably unworkable, ideas derived from considerations of other jurisdictions where bankruptcy is a consumer, rather than a business, phenomenon.
The report on company rescue and business reconstruction is rather more restrained in its recommendations, and the consultation period is still open.
In one disingenuous passage the report says there is a ‘problem of perception surrounding the insolvency profession’, and goes on to recommend that the change of name of the profession’s representative body from Society of Practitioners of Insolvency to Association of Business Recovery Professionals should be ‘matched by a real change of approach to the problems of companies in difficulties’.
This suggests our change of name was merely cosmetic. But the change was made to reflect the wide range of work, including rescue work, that insolvency practitioners already undertake and follows a decision to open membership to non-IP turnaround professionals. Our members are already ahead of the game; the government, it seems, has yet to catch up.
Our association is arranging a forum to facilitate debate on the company rescue report.
Anyone who has read the parliamentary debates on the Insolvency Bill will realise just how much need there is for improvement in the standard of debate on the subject.
- Stephen gale is president of the Association of Business Recovery Professionals.