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Insolvency Service

Volume 688: debated on Tuesday 9 January 2007

My right honourable friend the Parliamentary Under-Secretary of State (Jim Fitzpatrick) has made the following Written Ministerial Statement.

The Enterprise Act 2002 introduced a new financial regime for the Insolvency Service as from 1 April 2004. One feature of this new regime has been the use of general taxation to cover the cost of the service's enforcement functions; for example, work on director disqualification, bankruptcy restrictions orders and the reporting of criminal offences. Funds have been provided by way of the Department of Trade and Industry's (DTI) programme vote. In the light of the continued need for government to concentrate their resources on high-priority areas such as health, education, science and the environment, the DTI, like other departments, has been seeking ways in which to more efficiently allocate scant resources. Part of this process has been to identify areas where different funding arrangements might be introduced.

Therefore, from 1 April 2007 the cost of the investigation work done by official receivers and their staffs on disqualifications, bankruptcy restrictions orders and on reporting possible criminal offences will not be met by way of programme expenditure but will be recovered through fees charged to estates. As a consequence the administration fee charged to company and bankruptcy estates will rise broadly in line with inflation. This will enable expenditure on enforcement work to proceed at planned levels in 2007-08 and enforcement outputs, particularly disqualification and bankruptcy restrictions orders, to increase significantly.