Insolvency Service budget cuts may be affecting enforcement action
The number of disqualification orders made against criminal company directors in Great Britain has jumped by 83% in the last year*, from 65 to 119, as the Insolvency Service cracks down on rogue directors, says Moore Stephens, the Top Ten accountancy firm.
Moore Stephens explains that this criminal behaviour includes fraud and falsification of records, and acting as a director while disqualified.
Moore Stephens says that the Insolvency Service has seen its budget cut in recent years, leading to fears that rogue directors could go unpunished for serious offences. The organisation has laid off more than a third of its workforce in recent years, going from 3,200 staff to 2,000.
Jeremy Willmont, Head of Restructuring and Insolvency at Moore Stephens, says while more directors are being disqualified for criminal behaviour, many believe that even more could be caught if the Insolvency Service were better-funded – something that the new Government should strongly consider.
Says Jeremy Willmont: “While it’s great to see more criminal directors banned from running companies, there is a definite feeling that there are still a number slipping through the net due to a lack of resources at the Insolvency Service. The new Government should strongly consider increasing the Insolvency Service’s budget.
“Catching serious criminal behaviour by a company director often takes painstaking investigation work, but many believe that a lack of funding and staff limits the Insolvency Service in how many of these cases it can take forward.
“The risk is that the Insolvency Service may be unable to commit the resources needed to effectively enforce its regulations, and a rogue director could very quickly get back to running a new company.”
Directors disqualified for criminal behaviour up 83% in a year