Unpalatable as the subjects the fact remains that many business are or will be having to make redundancies in the next few weeks and months.
The eternal difficulty for any business looking to reduce its costs is that to get to the point where the savings feed through into the cash flow the cost (often significant) of redundancy has to be met. The paradox of businesses not being able to afford to make redundancies is likely to become a very real dilemma for many owners and managers.
The recent introduction of the Corporate Insolvency & Governance Bill made reference to the Insolvency Services Redundancy Payments Scheme. Specifically making it more accessible to businesses looking to restructure.
Much maligned by Insolvency Practitioners and those made redundant when their employer went into an insolvency process the scheme is also available to employers outside of a formal insolvency process.
The preamble to the Scheme specifically states, “if your business would become insolvent as a result of making the statutory redundancy payments, the Insolvency Service’s Redundancy Payments Service (RPS) may be able to help.”
The scheme provides possible short term loans to businesses to smooth the impact of the cash need is one possible solution. Be warned, at present the scheme is not very user friendly and as a result has been rarely used. But help is at hand.
The scheme is planned to become more easily accessible to assist with the increased focus on restructuring and turnaround in the new Insolvency Legislation. I will provide details as soon as I become aware of them.
