Almost two thirds of all director bans last year, which included people working in the property industry, were related to misconduct and fraud related to covid loans although most avoided criminal prosecution, the Insolvency Service’s Annual Report and Accounts for 2023-24 shows.
The latest statistics released by the Insolvency Service this week shows the level of work the agency carried out in 2023-24 to tackle Covid loan abuse.
With billions of pounds of covid-related fraud, the Insolvency Service annual report showed that 831 directors were disqualified in 2023-24 for abuse and fraud over bounce back loans and other covid support programmes, against a total of 1,222 director bans, with 22 criminal prosecutions carried out as part of steps towards the recovery of nearly £3m.
Dean Beale, chief executive of the Insolvency Service, said: “We have continued to maintain focus on fraud related to Covid-19 financial support schemes, increasing our enforcement outcomes from 48% last year to 62% of all our 2023-24 disqualification and criminal outcomes.”
For the first time the number of directors disqualified for more than 10 years represented nearly half of all bans at 47%, up from 30% the previous year. This is a sharp rise from 2021-22 when only 6% or 40 odd directors were disqualified for such a long period.
The annual report also showed that Official Receivers handled 10,907 new insolvency cases, up significantly from 9,000 in 2022-23 and returned £59.2m to creditors – an increase of nearly £15m on the previous year’s £45.7m.
Total funding for the Insolvency Service was £80m, up from £68.1m, while it reported a £7.9m surplus due to slippage on the IT investment and transformation activity, and adverse cost settlements moving into 2024-25.
Total operating expenditure compared to 2022-23 increased by £221.2m to £661.9m, driven by an increase in Redundancy Payment Scheme payments of £212.5m due to a rise in the number of settlements made compared to last year.
Future plans to tackle fraud include ongoing investment in IT data analytics systems to improve investigation activities, and the launch a new digital service for customers, replacing paper-based reports to creditors and proof of debt forms with online submissions and reporting options.
The Insolvency Service Annual Report and Accounts 2023-24 can be viewed here.
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