Fewer Directors Being Made to Account for Their Actions

A recent report by R3, the Insolvency Trade Body has warned that a shortage of resources at the Insolvency Service has meant that unscrupulous company directors are escaping any action against them. 

Only 1,151 of 5401 reports (21%) sent by Insolvency Practitioners to the Insolvency Service resulted in a disqualification court order or undertaking, the administrative equivalent. This compares with 27% last year and 45% ten years ago. 

R3’s president, Lee Maning said “it is not apathy at the Insolvency Services it is lack of resources. We are reporting “misconduct” and the authorities aren’t acting. Later on, it results in new victims that could have been protected if it wasn’t for the lack of resources. Justice needs to be seen to be done.”… “We need to push up the disqualification rates and make sure those who have been disqualified stick to their terms if we are to maintain public confidence.” 

Tim Corfield said “These comments reflect our experience at Griffin & King and an issue we have been highlighting for some time”.

Written by Tim Corfield

http://www.griffinandking.co.uk

WHY THE HURRY TO PRODUCE GDP FIGURES IF THEY COULD BE MISLEADING?

We are now being told that better than expected construction figures may well mean that the second quarter GDP figures published last month will be revised upwards. The Office for National Statistics (ONS) reported last month that the economy shrank by 0.7% and based on this more recent data this may well now be revised upwards to 0.5%. 

The initial estimate was based partly on the assumption that construction output fell by 5.2% but now more data has been analysed, the ONS believe that the reduction was only 3.9%.

The ONS admits that much of the data gathered for the second quarter was a ‘best guess’. It bases its initial estimates solely on a monthly survey of 44,000 businesses covering the production, manufacturing, services, retail and construction industries. It polls firms of all sizes, but admits that those with fewer employees are less likely to be included – meaning that small fast growing businesses would be excluded from the calculation.

By the time the preliminary estimate is released, the ONS will have around 70%to 80% of responses back from its survey covering the first two months of the quarter (April and May) but for June the responses received is only around 20% to 30% and the ONS fill in the gaps based on historical data and a lot of assumptions.

The ONS admits that the bad weather and extra bank holiday made the estimate ‘more challenging’! These figures are unlikely to be fully revised for up to five years by which time who will care! Are we really to believe that Spain’s economy declined by 0.4% while the UK’s economy was down by 0.7%?

Tim Corfield commented “Given the political turmoil that these figures can produce and influence on business wouldn’t it be better to hold fire with producing figures that could indicate the wrong trends? Sending out the wrong signals could be damaging for the economy.” 

Andrew Sentence (a former member of the Bank of England’s monetary policy committee) has called for the ONS to include broader data including employment information. He commented “What the ONS is not very good at is taking a common sense view of economic data. They need to be much better at cross-checking technical data to give a true picture.”

Written by Tim Corfield

http://straightalkdebt.com/