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Developments in Scotland
There are a number of developments currently underway in Scotland. These are:

• The advent of Debt Arrangement Schemes
• The Bankruptcy and Diligence (Scotland) Bill
• The Protected Trust Deeds (Scotland) Regulations

Here follows a short summary in relation to each written from the perspective of the public interest on the need for equivalence of the effectiveness of regulatory and monitoring regimes as they apply to personal debt management.

The advent of Debt Arrangement Schemes
As indicated in the 2004 Annual Report, the Debt Arrangement Scheme (DAS) established by the Scottish Executive came into force on 30 November 2004 to provide a form of debt management rather than debt relief. It was envisaged that debt arrangement plans would be supervised by the voluntary sector with trained money advisers carrying out the work. Fund distributors are also appointed. To date, approximately 60 advisers have been appointed and approximately one hundred and fifty plans set up.

The Bankruptcy and Diligence (Scotland) Bill
It is intended that the provisions of the Bill will replace the existing regulatory powers contained in Schedule 5 of the Bankruptcy (Scotland) Act 1985. The Bill was introduced in the Scottish Parliament on 21 November 2005. The Protected Trust Deeds (Scotland) Regulations 2006 In January 2006 the Scottish Executive issued a Consultation Paper (with responses to be submitted by 14 April) containing a draft of regulations on the Reform of Protected Trust Deeds (PTDs) in Scotland.

The Scottish Executive appears to be satisfied that, in principle, Protected Trust Deeds are a useful tool and have a place in a reformed and integrated system of debt management and debt relief. Concerns have however been expressed by the Scottish Executive about the way in which PTDs have been used since 1998.

The following table demonstrates the very significant increase in the number of PTDs since 1998:

Table 2 – The Growth of Protected Trust Deeds in Scotland

The overall aim of these initiatives is, in all of which the Accountant in Bankruptcy (AiB) plays a role, in the words of the Scottish Executive “to provide a better integrated and more effective system of debt management and relief in Scotland.” Under the Scotland Act the power to legislate on insolvency and bankruptcy procedures is devolved to the Scottish Parliament, whereas the power to regulate IPs throughout the United Kingdom is reserved to the UK Parliament.

These new developments illustrate some of the potential consequences of this division of responsibilities. Both the legislation introducing DASs and the role envisaged for the AiB in the Bankruptcy and Diligence (Scotland) Bill will lead to a substantial portion of work on personal insolvency procedures being moved away from IPs either to the public sector under the AiB or to the voluntary sector. While some aspects of the new Scottish legislation may fall outside a strict definition of the IPC’s remit, all of it is relevant as part of the wider context within which we work. There is in our view a public interest in relation to all statutory insolvency procedures that both creditors and debtors’ interests are adequately protected.

In the case of debtors this includes an expectation that debtors are properly advised by those whoever supervises these procedures on the best course of action available to them. We emphasise that this does not mean that such procedures should necessarily be reserved for IPs. We hope to discuss this and other aspects of the changes in the Scottish legislation with the relevant Scottish authorities later this year.

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