ePolitix.com speaks to Phil Wilson, MP for Sedgefield, and Peter Sargent, president of R3 the insolvency trade body about the memorandum of understanding signed to help those people who have been made redundant.
How will the memorandum of understanding signed by Jobcentre Plus, R3 the insolvency trade body and the Insolvency Service help people facing redundancy?
Phil Wilson MP: On some occasions in the past, there was a breakdown of communication between the insolvency practitioners and Jobcentre Plus. Companies that had gone into administration or liquidation and had the administrators called in, would on some occasions neglect to inform Jobcentre Plus that people were being made redundant. Jobcentre Plus may have tried to get the information and found that it wasn’t forthcoming.
It was the people being made redundant who suffered. They may have been in what they thought was a settled workplace, working for a company for several years, suddenly finding themselves without a job, lacking confidence and not knowing what to do next. This is why it is vitally important that Jobcentre Plus has access to those people who have been made redundant as soon as possible. The sooner people get in touch with Jobcentre Plus and start receiving Jobseeker's Allowance, the sooner they are likely to get back into work. Around 60 to 70 per cent of all those people out of work who receive support from Jobcentre Plus, get a job within six months.
Peter: The memorandum gives us all a framework to work within, so the insolvency practitioners know they can contact the people at Jobcentre Plus, and in turn Jobcentre Plus know they can get into businesses to talk to MPs. This will hopefully enable us to offer the best possible service for the employees who are being made redundant.
Being made redundant is a very unpleasant experience: you have questions spinning around in your head and you want to talk to people with the answer. Insolvency practitioners are good at matters relating to insolvency, but we are not experts on benefits and redundancy payments. This is why it is great that we can call in the specialists from Jobcentres to explain everything.
How have you both worked to ensure this agreement came into practice?
Phil Wilson MP: First, I put down an early-day motion in the House of Commons to highlight the problem. This received over 90 cross-party signatures. In April I then put down a ten-minute rule bill, which was a more detailed version of what I wanted to see put in place.
On the back of this, Pat McFadden, the former minister for employment relations and postal affairs, and Tony McNulty, the then minister for employment and welfare reform, brought together Jobcentre Plus and the Insolvency Service.
Peter: We at R3 contacted Phil when we saw the ten-minute rule bill, and thought it was something we could help with. We had several meetings with Phil and Jobcentre Plus to thrash out the problem and see if we could resolve it. The ministers all got involved, and we came up with this memorandum of understanding.
Would you like to have seen this type of joined-up working actioned sooner?
Peter: Yes, it would have been great if we could have brought it into practice earlier, but we are very pleased with it and I do think this type of joined-up working could be used in other situations.
Phil Wilson MP: Hindsight is a great thing. Over the last 12 to 18 months, due to the downturn in the global economy, a lot more companies have gone into insolvency or liquidation, resulting in more people facing redundancy.
It is in those circumstances that you start to see some of the problems that arise.
The one thing I like about this memorandum of understanding is that it is going to be reviewed formally every three months.
This will hopefully ensure that everybody is doing what they said they are going to do and the lines of communications are working. I will take a keen interest in this going forward.
What has the feedback from Parliamentarians been like?
Phil Wilson MP: There was a good response from colleagues from all sides of the house with the early-day motion, which over 90 parliamentarians signed. The ten-minute rule bill was then an incentive to parliamentarians, trade bodies and Jobcentre Plus to actually do something about it.
Are you hoping this agreement will ensure the services offered by Jobcentres to those facing redundancy is uniform across the country?
Phil Wilson MP: That is what I am hoping for, and that it is why it needs to be reviewed every three months, so that we can ensure that happens. I think it is a step in the right direction.
I was unemployed myself many years ago, and some of the people who have been made redundant in my constituency are friends of mine. I don't think it is right that they can be treated like a bits of machinery, where the administrators flog them off to pay their debts. These are people who have families, they have relationships, and children to look after, and they need to be treated with a bit of respect, which is what I hope this memorandum will ensure.
Peter: I think it’s important to be clear that insolvency practitioners don’t sack people for no reason. In most cases, it’s only done because there’s no money left in the company to actually pay them. Nevertheless, I think the memorandum will make things better for employees facing redundancy because they’ll get better access to the information and support they need. We as insolvency practitioners are very pleased about this, as are the Jobcentres, the Insolvency Service and all the parliamentarians that have been involved with this. I think it is a great example of profession, state and Parliament working together.
