Annual Report and Accounts 2023-24

Statement by Chief Executive on performance for the period

The following pages provide an overview of Accountant in Bankruptcy (AiB), its purpose and how AiB performed during 2023-24 in providing statutory debt solutions to the people of Scotland and supporting and working with those who make this possible.

AiB’s 2023-24 business plan set out our priority for driving forward an agenda of continuous improvement of our processes, systems and stakeholder engagement.

A new Bankruptcy and Diligence Bill including taking powers to introduce a mental health moratorium was introduced to Parliament in late April 2023. The Bill was considered by the Economy and Fair Work Committee of the Scottish Parliament between September and November 2023. The Committee’s Report on the Bill was published on 23 January 2024.

The Bankruptcy and Diligence (Scotland) Act 2024 received Royal Assent on 15 July 2024. Provisions in the Bill will be brought into force by commencement regulations, with the first provisions expected to come into force in January 2025. The Act contains enabling powers for a Mental Health Moratorium, and a public consultation on draft regulations for this will be published in December 2024.

We continued to update operational processes in 2023-24 as we drive towards a ‘digital by default’ model. Further administrative processes were moved to our case management systems for money advisers, payments distributers and private trustees, along with AiB internal process. All changes are designed to streamline services, improve efficiency and contribute towards sustainability goals through reducing paper consumption.

During the year AiB awarded 4 contracts to ensure the continued provision of operational and support services for both AiB and its stakeholders.

This overview contains some high-level statistics on bankruptcies awarded, trust deeds protected, and debt payment programmes approved under the Debt Arrangement Scheme (DAS). It includes an assessment of the most significant risks facing AiB and reports on our key performance measures both on service delivery and on our wider sustainability goals.

AiB’s mission gives an overarching framework for how we deliver our statutory and general functions:

• delivering, with stakeholders, a range of options for individuals seeking debt relief and debt management
• supervising personal insolvency in Scotland
• providing statutory information by maintaining a public register of insolvencies and the DAS register
• supporting ministers in developing policy options to improve Scotland’s statutory debt solutions and diligence measures
• protecting creditors and the public
• achieving best value

AiB maintains a set of core organisational values where it ensures activities are:

• independent
• responsive
• accountable
• transparent
• fair
• open

The Scottish Government’s National Performance Framework is the guiding light for the government and its Executive Agencies. It contains 11 National Outcomes supported by 81 national indicators. AiB's 2023-24 business plan sets out the future objectives for the organisation which will help deliver against these outcomes and indicators, particularly the indicator for unmanageable debt.

Key issues and risks affecting the organisation

Risk Management

AiB maintains a corporate risk register which identifies the critical internal and external risks with potential impacts on AiB’s work and pinpoints the actions required to reduce the threat of these risks occurring or mitigate their impact should they materialise. The register is reviewed on a quarterly basis by the Senior Management team and presented quarterly to the AiB Audit Committee and AiB Advisory Board for further scrutiny.

Each branch within AiB has a risk register for their business area. Business critical risks from the branch registers feed into the corporate risk register. AiB’s assurance map documents business activity and provides assurances to senior managers and the Accountable Officer. The map also serves as a tool to identify emerging risk areas.

Key corporate risk management activities during the year were:

Trends and factors affecting the future

Whilst the Debt Arrangement Scheme continued its recent strong growth across 2023-24, personal insolvency numbers remained broadly flat. Compared to the period before the pandemic, the “new normal” is both markedly lower than the previous period, and reflects a different basket of cases – less creditor cases, less full administration cases, less private trustee cases, and significantly more Minimal Asset Process (MAP) which is a type of bankruptcy for people with low income and few or no assets, and other cases with no assets and no application fee paid. Whilst the current basket of cases is less costly to administer, there are also significantly fewer cases in which it seems likely that the Agency will be able to recover its costs. There are also signs of a reduction of the number of private sector trustees taking on or managing a substantial caseload, one of many factors being considered in the independent review of the insolvency system being led by Yvonne MacDermid CBE.

Our central assumption is that the trends observed across 2023-24 will continue across 2024-25. Together with the financial pressure on the whole of public sector, this will require AiB to deliver significant efficiency savings, both in the coming year and into the medium term. Our plans to do so are set out in the AiB 2024-25 Business Plan.

Information risk and data protection

AiB is committed to ensuring it fully meets data protection requirements, and all staff complete annual training to ensure compliance with the relevant legislation.

AiB has responsibility for processing and handling personal and sensitive information, such as individuals’ personal financial details. AiB follows Scottish Government policy on information security and has a Senior Information Risk Owner along with a Data Protection Officer and Information Asset Owners in place to manage risk to personal information.

To best ensure AiB meets its statutory obligations, AiB has developed a comprehensive privacy and data protection policy which is published on our website.

The introduction of the General Data Protection Regulations (GDPR) highlighted individuals’ rights to access information held about them, to have inaccurate information amended and to ask for personal information to be deleted. During 2023- 24 AiB received 211 requests (2022-23 - 272 requests) for disclosure of personal data under Schedule 2, Part 1 of the Data Protection Act 2018 and 12 subject access requests under Section 45 of the Data Protection Act 2018 – details are given in the following table:

Risk of fraud, bribery or corruption

All Scottish Government staff are required to adhere to the values of the Civil Service Code of Conduct. This includes declaring any interests which may lead to a conflict on a centrally recorded human resources database.

AiB has a fraud policy and response plan and a counter fraud officer who reports at each Audit Committee meeting on any matters of interest or concern. All staff undergo mandatory fraud training when entering the organisation and must complete annual refresher training.

During 2023-24 there were no incidents of fraud identified by AiB (2022-23 – no incidents). In 2023-24 an additional training session on financial and procurement fraud was held as part of AiB’s cyber week. This session provided more information on the fraud threats facing public services such as AiB,  what to do in the event of a suspected fraud and the steps taken by AiB to prevent such frauds occurring.