IPA Volume Provider Regulation Scheme 2021 Benchmark Report

The IPA has published the third Benchmark Report on its Volume Provider Regulation (VPR) Scheme.

The VPR Scheme was developed in 2018 and launched in 2019, in response to the rapid change being seen in the Individual Voluntary Arrangement (IVA) market and with improvement of standards and providing assurance to those involved in the market its aims. The Scheme was later extended to cover Scottish Protected Trust Deeds (PTDs) administered at volume.

The VPR Scheme is the only example of continuous monitoring in insolvency regulation. In 2021, we saw a reduction in complaints across Scheme members – down to 100 from 205 in 2020, therefore suggesting a marked improvement in standards.

During 2021, the VPR Scheme covered 68% of the IVA market and 79% of the PTD market. We expect further increase as new members are anticipated to join. We were delighted to welcome the most recent joiners to the Scheme, Harper McDermott, StepChange Voluntary Arrangements and The IVA Advisor.

As members may know, we have led the way since 2016 by calling for the regulation of insolvency firms. We strongly believe that this is a vital step to take in order to improve regulation and were pleased to note a corresponding view from the Insolvency Service in its Future of Insolvency Regulation consultation, to which we recently submitted our response (access our consultation response in this month’s issue).

The VPR Scheme, with its continuous monitoring of activity within firms, is a direct result of our stance on firm regulation and desire for better oversight. The Scheme is unique to the IPA, and therefore there is inconsistency in how all volume providers are regulated. As well as the matter of firm regulation, we have flagged this inconsistency of regulation as an important issue to be considered in the Insolvency Service consultation.

Similarly, we view the IVA and PTD markets to have outgrown the existing legislation, as this was designed for a different era and without the commercial developments which now dominate the market in mind.

The flexibility of the VPR Scheme is one of its key benefits, as regulatory activity is tailored according to need. We have continued our work on advice call reviewing, increasing the number of calls reviewed to 1,010 calls (2% of new IVAs and 0.5% of new PTDs) – representing an uplift of 564% on 2020. We have also continued our focus on case failures last year. We found that 5.74% of Scheme member IVAs failed in 2021, a noteworthy improvement on the Insolvency Service’s 8.4% sector statistic in 2019.

Read about all of our activity in the 2021 Benchmark Report, available here.