21 December 2011

The Institute of Credit Management (ICM) has given a cautious welcome to the letter from Ed Davey (Minister for Employment Relations, Consumers and Postal Affairs) in response to consultation on reforms to the regulation of insolvency practitioners, and specifically news that he has not ruled out moving to a single regulator.

"We very much welcome the plan to explore the idea of a single regulator, and to legislate to remove the Secretary of State from the direct authorisation of IPs," says Philip King, Chief Executive of the ICM. "We also welcome the plan to see how best to strengthen and simplify processes for handling complaints.

"Restoring confidence in the insolvency regime is critical for creditors, and so plans to improve the transparency and disclosure of fee charging in the light of any new complaints regime will also go a long way to rebuilding trust between the two parties."

Although Mr King says that there is much to commend Mr Davey's proposals, including the idea of widening the membership and improving the timelines and efficiency of the Joint Insolvency Council (of which the ICM has recently been appointed a lay member), there are some areas where more could have been said: "Although on face value the letter comprises considerable detail, below the surface there is little by way of any firm commitment to action beyond vague expressions of intent," he says.

"When a government suggests that it might 'explore' issues further, we hope that this isn't simply code for kicking those issues into the long grass."