Recommendations 2005 - Statistical Information about IVAs

Adequate statistics on the outcomes of IVAs are essential both for assessing the success of the IVA as an instrument of policy and for monitoring the performance of IPs in giving “best advice” when IVAs are set up and in supervising them subsequently. We therefore welcome the recent action taken by the IS to introduce new software, which will enable them to track the duration and completion or failure of all IVAs on their Birmingham Register.

The IS has confirmed to us that this software will enable it to produce a rolling annual series of statistics showing the completion/failure rates of IVAs taken out in previous periods both in aggregate and for individual IPs and for each RPB. We recommend that the IS should now discuss with the RPBs how this data can best be used systematically by the regulators to monitor the performance of IPs both collectively and individually.

The regular data produced by the new software does not include any information about the financial results of IVAs, such as the relative proportions of the debtors’ contributions being returned to creditors and being absorbed by administrative costs, including IPs’ fees. We consider that such information would also be highly relevant to monitoring the success of IVAs as an instrument of policy and the performance of individual IPs in supervising them.

We understand that the IS has carried out an assessment of the financial outcomes of a sample of recent IVAs, which some RPBs have indeed found useful for their monitoring work. We therefore recommend that the IS and the RPBs should now examine how these financial assessments can be produced electronically on a regular basis. We believe a necessary first step may be to introduce a standard format which could be used by IPs to send in their statutory closing statements of account to the IS electronically.

Electronic reporting should reduce the regulatory burden on IPs, while improving the effectiveness and reducing the costs of the RPBs’ monitoring.

RECOMMENDATION: We recommend that the IS should now use the information about IVAs on its Birmingham Register to produce a rolling annual series of statistics showing the completion/failure rates of IVAs initiated in previous years both in aggregate and for individual IPs.

We suggest that the aggregate statistics should be published and that the IS and the RPBs should make systematic use of the completion/failure rate information on the Birmingham data-base to assist their monitoring of their IPs’ performance in setting up and supervising IVAs both collectively and individually. We further recommend that the IS and the JIC should follow up the recent successful sampling exercise and take early steps to collect regular annual data on the financial outturns of individual IVAs in electronic form for the purpose of assisting the RPBs’ monitoring of the performance of their IPs.

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