Immediate action needed to save our charity sector, writes Nora Smith

Nora Smith, Chief Executive, CO3

The coronavirus pandemic has had a devastating impact on our society and economy. Jobs have been lost or furloughed, crucial public services have been halted and our way of life has changed completely.

The charity sector in Northern Ireland has been severely hit and thousands of local charities have seen their fundraising and donations dry up overnight. The cancellation and postponement of major fundraising highlights, like the Belfast Marathon, has also meant that charities will miss out on major fundraising opportunities that they rely on.

The Chancellor Rishi Sunak announced £750m of support and funding for charities over three weeks ago, with £22m allocated to charities in Northern Ireland. A sum of this has been allocated to hospices (£6.75 million) and this week Communities Minister Deirdre Hargey announced that £15 million would form a Covid-19 Charities Fund to help those most in need.

While we are grateful for all funds, this equates to just £2,459 when split equally between our over 6,100 local registered charities. This is clearly not enough to sustain the sector when some charities have already reported losing over £100,000 in income.

CO3, in partnership with the Institute of Fundraising, recently surveyed over 200 sector chief executives to understand the immediate pressures they are facing. The results illustrate a sector that finds itself on a financial cliff-edge.

Over three quarters of charities are already experiencing serious financial difficulties and the vast majority have found themselves frozen out of support schemes previously announced by Government. 97% of charities are ineligible for the government’s business interruption loans, and only 8% are able to access support grants announced by the Executive.

Most worryingly, however, nearly 40% of charities have been forced to cease some of their key services to protect their cash flow, with a further 33% considering similar steps in the coming days and weeks.

Behind every disrupted frontline service are people who rely heavily on local charities. Without significant government intervention, more and more people will be affected by this crisis.

CO3 and the charity sector are calling on the Executive to help stabilise the third sector in Northern Ireland, save jobs, and protect vital frontline services by:

·        Ensuring the Covid-19 Charities Fund and the Hardship Funds are allocated with immediate effect.

·        Advising on eligibility and how charities can access these funding streams as a matter of urgency.

·        Opening up the business and employers grant schemes to charities and social enterprises.

·        Creating a wider support package including a Stabilisation Fund to enable charities to stay afloat. Amend the Job Retention Scheme to enable charity workers to be redeployed within their charity and to enable charities to access 80% of wages immediately rather than having to pay and claim back.

·        Setting up a Third Sector Resilience Fund to support the recovery of the charity sector after the crisis passes.

Northern Ireland is an incredibly generous place and people here donate and fundraise in their millions every year. But our sector cannot rely on the generosity of ordinary people to pull us out of this crisis. Meeting our request now will protect vital services which improve the lives of the most vulnerable in our society. The Executive must step in now or watch our charity and voluntary sector collapse.

Brown O’Connor Communications Weekly Look Ahead: Week Commencing 11 May 2020

Forward Look

• The First and Deputy First Ministers stated that no restrictions are to be lifted to ease lockdown in Northern Ireland. Arlene Foster said that the ‘Recovery Roadmap’ for lifting restrictions is a work in progress, however the level of infection is still too high to ease measures.

• Prime Minister, Boris Johnson, is to outline the UK Government’s strategy to ease the current lockdown on Sunday at 7pm. The Prime Minster told PMQs some measures will be introduced on Monday. He is expected to make a statement to the House of Commons regarding the new measures on Monday. Anticipated measures include relaxed guidance on outdoor activities such as limitless amounts of outdoor exercise as long as a two metre distance is still observed.

• MLAs debated the 2020-21 Budget Bill in the Assembly on Tuesday. The Budget includes key initiatives such as a skills strategy; tourism strategy; energy strategy and preparation for the UK leaving the EU. The Bill will be debated again when Finance Minister, Conor Murphy MLA, lays the Estimates to the Assembly. The final stage of the Bill is expected to take place on 29/30 June. To read the Budget document presented to MLAs click HERE

• An Taoiseach, Leo Varadkar, has outlined the Irish Government’s exit strategy to ease the lockdown precautions for COVID-19. The proposed plans, beginning on 18 May, will have five phased stages, with three week increments to ensure a second surge does not occur. The final stage of the process will begin on 10 August, with all staff back to work and high-risk retail services to reopen.

• The DUP have written to the Chancellor, Rishi Sunak MP asking him to extend the Job Retention Scheme beyond its June end date. The Letter suggests that some sectors including airports and hospitality could need financial support until October.

• Economy Minister, Diane Dodds MLA, is to update the Economy Committee on the Department’s COVID-19 response on Wednesday 13 May. The Committee will also hear evidence from Retail NI, Enterprise NI, InterTrade Ireland and NI Retail Consortium.

• The Executive Office will match the UK Government’s funding for the Derry and Strabane City Deal, bringing the total to £210m. Michelle O’Neill revealed that The Executive Office will now take the lead on progressing a Graduate Entry Medical School at Magee.

• Finance Minister, Conor Murphy MLA, and Department of Finance Permanent Secretary, Sue Gray, will brief the Finance Committee on The Functioning of the Government Bill 2020.

• Infrastructure Minister, Nichola Mallon MLA, announced MOT centres that are not being used for Covid testing are to reopen by the start of July. She also told the Assembly that a Walking and Cycling Champion will be appointed from within her Department.

• The leaders of Fianna Fail, Fine Gael and the Green Party have entered into formal negotiations on a Programme for Government today. Negotiations are expected to go on for a number of weeks.

• Queen’s University have secured funding to conduct a trial with the aim of developing a rapid diagnostic test for COVID-19.

• The DUP are preparing a policy paper on the subject of Community Tourism and how it can be encouraged and managed throughout Northern Ireland.

• The House of Commons will vote remotely until further notice. The Speaker, Lindsay Hoyle MP, authorised the voting system on Wednesday to allow MPs to follow Government guidelines and work from home.

• Communities Minister, Deirdre Hargey MLA, announced her intentions to set up a COVID-19 Charities Fund, valued around £15m, to help support local charities that have been negatively impacted by the current pandemic.

• Northern Ireland Questions will be heard in the House of Commons on Wednesday 13 May. This will be the first time Secretary of State, Brandon Lewis MP, will take questions following taking up the role in February. He will also give oral evidence to the NI Affairs Select Committee on Thursday 14 May.

• SOLACE NI will brief the Communities Committee on the impact of Coronavirus on Local Councils on Wednesday 13 May.

• The Ireland/Northern Ireland Specialised Committee which is tasked with implementing the Northern Ireland Protocol of the Withdrawal Agreement met on Thursday 30 April. The Committee is made up of officials from the UK Government and European Commission. The two sides agreed to convene the Joint Consultative Working Group established under the Protocol which will be a further forum for discussion in relation to the Protocol.

• The Economy Committee has launched an Energy Strategy Micro Inquiry. The inquiry is in the context of the UK Government’s legislative target of net zero carbon by 2050. Deadline for responses is 29 May 2020.

• The DUP have co-opted two Councillors into Belfast City and Antrim and Newtownabbey Councils. Gareth Spratt was selected as a Councillor for Balmoral DEA in Belfast and Linda Irvine for Macedon DEA, Antrim and Newtownabbey.

Other Stories this week

• Doug Beattie MLA has replaced Mike Nesbitt MLA as the Deputy Chair of The Executive Office Committee.

• SDLP MLA, John Dallat, passed away on Tuesday following a long illness. The SDLP will co-opt his seat in due course.

• Finance Minister, Conor Murphy MLA, outlined £700m of new funding for infrastructure, regeneration projects and tourism across Northern Ireland. The investment includes £562m for City and Growth deals and £55m for the Inclusive Future Fund.

• Infrastructure Minister, Nichola Mallon MLA, announced £5.7m in funding for airports and connectivity during the COVID-19 crisis.

• Communities Minister, Deirdre Hargey MLA, stated that Council staff can apply for the Coronavirus Job Retention (Furlough) Scheme.

• Economy Minister, Diane Dodds MLA, announced £40m for a new hardship fund for micro-businesses who could not avail of the existing business schemes during the global pandemic.

• UK Minister of State for Trade Policy, Conor Burns MP, has resigned from his role following a seven-day suspension from Parliament for abusing Parliamentary Privilege. Ranil Jayawardena MP has been appointed as the new Minister.

Consultation

• Consultation on pilot to instruct experts in the family proceedings court Department of Justice. Deadline 8 May.

• Northern Ireland Renewable Heat Incentive Scheme – 2020 Tariff Review Department for the Economy. Deadline 26 May.

• Energy Strategy Micro Inquiry NI Assembly Economy Committee. Deadline 29 May

• Addressing the Legacy of Northern Ireland’s past: The UK Government’s New Proposals NI Affairs Select Committee. Deadline 1 June.

Help keep our essential waste management workers safe, writes Karen Smyth, NILGA

Karen Smyth, Head of Policy, NILGA

In an effort to halt the spread of the coronavirus and to follow social distancing guidance, councils across Northern Ireland made sensible changes to their bin collections and temporarily closed waste recycling centres, writes Karen Smyth, Head of Policy at the Northern Ireland Local Government Association (NILGA).

We welcomed Environment Minister Edwin Poots’ recent guidance on how household waste recycling centres (HWRCs) may safely and gradually re-open. Each of our 11 councils are now considering the best course of action and it will be up to individual councils to manage the opening of their household recycling centres.

The majority of HWRCs were closed to comply with government advice to restrict unnecessary travel but, as the situation evolved and a way to open centres on a restricted basis (whilst still complying with government advice and taking a safety first approach) was identified, councils were able to make informed decisions on plans to re-open.

Protection of life and public health remains local government’s number one priority. Councils will be working closely with Minister Poots and his Department to ensure that the necessary systems are in place to enable centres to reopen for essential waste services.

We understand that this extended period at home is a tempting time to do a spring clean and tidy up the house. However, substantial clearing out of your home and an increase in your household waste at this time could place much greater strain and pressure on local waste services and workers. We are urging everyone, where possible, to take these simple steps to reduce and sensibly manage their waste.

Where possible, try to store waste at home during this time. Reducing the amount of waste produced at home will greatly assist your council until their recycling centres re-open. When you are out and about, take your litter home with you and reduce the level of waste that our key workers find out on the streets. Never dispose of gloves or other personal protective equipment in the street as this poses a significant health risk to our workers also.

Councils across Northern Ireland are deeply concerned about the behaviour of some irresponsible individuals who are causing an increase in fly tipping, littering and illegal dumping of animal carcasses. Actions like these are unlawful, place serious strain on our key public services and as the Ulster Farmers’ Union has already pointed out, fly tipping could result in the deaths of livestock. We would strongly encourage farmers to use the appropriate channels for disposing of dead farm animals, and to seek advice from DAERA if required.

The most recent recycling and waste management figures released by DAERA – which showed that half of all household waste in NI is now recycled - remind us of the great work that councils and waste management workers do to protect the environment and keep our towns and cities clean and tidy. Help our frontline colleagues and keep them safe by avoiding putting any unnecessary burden on them. Councils need everyone to play their part in responding to the challenges we face, and we would like to thank the local community groups, sports clubs and individuals that have already organised and participated in socially distanced litter picks.

Charities Fund welcome but much more support needed, says CO3

Nora Smith, Chief Executive, CO3

Reacting to the announcement by Communities Minister Deirdre Hargey MLA of a £15m Covid-19 Charities Fund, CO3 Chief Executive Nora Smith said:

“This is a welcome announcement from Minister Hargey which will help relieve some of the immediate pressures within our local charity sector. Charities have seen their incomes decimated due to the pandemic and at a time when demand for services has actually increased.

“This fund must be the first measure in a wider and much more comprehensive rescue package to save the sector.

“We now need urgent clarity over the application criteria and eligibility for this fund. This injection of money needs to reach those organisations on the ground without delay.”

Derry Chamber emphasises need for north-south co-ordination on re-opening to Stormont Committee

Paul Clancy, Chief Executive, Derry Chamber

The Chief Executive of Derry Chamber has told Stormont’s Economy Committee that a joined-up approach is needed north and south when it is safe to re-open.

Derry Chamber joined the Belfast, Newry and Causeway Chambers to outline the impact that Covid-19 has had on businesses in Northern Ireland.

Paul Clancy, Chief Executive of the Londonderry Chamber, told MLAs that there are additional concerns from businesses that operate in border areas and how different re-opening plans could be detrimental to businesses on one side of the border if there is no co-ordination.

At the joint presentation, the four Chambers also told the Committee that the Executive must make clear, as soon as possible, how it plans to restart the local economy and set out what support and assistance it will give businesses to prepare for reopening.

In a joint presentation to the Assembly, the Chambers emphasised that we are only at the beginning of the economic challenges created by COVID 19 and our businesses need a combination of the short term financial interventions already announced, as well as long term investment to support the rebuilding of our economy and protection of jobs.

Chief Executive of the Derry Chamber, Paul Clancy said:

“I welcomed the opportunity to talk to MLAs in Stormont’s Economy Committee today. Obviously the priority is the health and wellbeing of the population, but businesses are already looking at how they can re-open when it is deemed safe to do so. That requires a level of planning now. We need guidance and assurances from the Executive that businesses will be supported as much as possible to do this.

“Together with the Belfast, Newry and Causeway Chambers, we have urged MLAs to echo our concerns to the Economy Minister. It is vital that support measures are not short-term and aim to help businesses and keep our economy going.

“The restart of the economy must be carefully managed and responsibly phased to ensure it can fully recover, to protect workers and the wider public, and to avoid having to shut down again, a measure which would simply decimate our regional economy.

“Also, as a regional economy which is heavily reliant on cross border trade, North West businesses need to see greater co-operation and a more synchronised approach between Northern Ireland, the rest of the UK and the Republic of Ireland. It is very confusing and frustrating for businesses which operate on both sides of the border to see one set of advice and a detailed relaxation plan in Donegal, but another set of guidelines and less clarity in Derry. Businesses need to see light at the end of this tunnel, and I am urging the Executive to urgently publish its lockdown relaxation plans.

“We also raised concerns that the Coronavirus Job Retention Scheme for furloughing workers is closing at the end of June. The government must ensure that there is no cliff-edge situation which leaves businesses with no other choice but to lay off their workers. For the economy to bounce back, everything must be done to ensure jobs are saved and businesses are kept afloat. Hundreds of local businesses, especially those in sectors like retail, hospitality, and tourism, will need a furloughing scheme of some description extended well beyond June and the summer.

“Protecting the health of workers and preventing the further spread of this virus will be the number one priority for companies as we return to normality. Firms will need to implement new social distancing measures in the workplace as well as significantly altering their work environments. However, this will come at a substantial cost to small businesses and financial support will be required from the government to ensure health and safety advice is fully adhered to. If the government is expecting companies to reopen and get back to work, greater support and clearer guidelines are urgently needed to allow companies to do this safely.”

Pharmacy body warns of workforce pressures as students face further delay in joining the workforce

WARNING: Gerard Greene, Chief Executive, Community Pharmacy NI

The body representing community pharmacy in Northern Ireland has warned that if the delay in pharmacy pre-registration students joining the PSNI register is not reversed, then the sector will face another crisis. 

The warning comes on the back of the news that the pharmacy regulatory body in Northern Ireland plans to delay the pre-registration exams from June until August at the earliest.

The exams are for pre-registration pharmacy students who have already completed their pharmacy degree and have been working in practice for around ten months. 

The delay means that 150 newly registered pharmacists will not now be joining the pharmacy workforce this summer as planned and at a time when extra capacity is needed. 

Chief Executive of Community Pharmacy NI, Gerard Greene said:  

“This news is a blow to our network because every year we rely on this influx of newly registered pharmacists to take up roles in our community pharmacies. This is even more of a problem during this pandemic as our workforce has struggled with the rise in demand for services and are operating at very limited capacity.” 

“The new registrants typically join the workforce over the summer months and the delay in this means we are not likely to see these pharmacists bolster the workforce until the autumn.” 

“This is also very different to what we have seen from our medical and nursing counterparts who immediately agreed to fast-track final year students and get them into the workforce so they could join frontline efforts to fight coronavirus. This is not the time to delay the qualification of key health care workers.” 

“We are calling on the Minister to intervene to get this decision reversed and allow pharmacy pre-registration exams to go ahead in June as normal.”

Since the onset of the coronavirus pandemic, community pharmacies were one of the first services to witness a steep and immediate increase in demand for medicines.

A commitment to keep the service going has seen many pharmacists work longer hours and battle with capacity issues due to self-isolation of staff displaying symptoms of Covid-19.  

Danielle Harkin, Pharmacy pre-reg student added: 

“We have been working towards the completion of our pre-registration period in the hope that we could be employed as fully qualified pharmacists this summer and play our part in this pandemic. Given we have all already graduated, we would have expected our registration to be expedited rather than delayed.  Many of my fellow students feel the same sense of frustration.” 

“It is bitterly disappointing to think that we cannot join our healthcare colleagues on the frontline and we hope this decision can be reversed to allow us to get on the register and get to work.” 

Third Sector CEO Group reacts to news of a £40 million Hardship Fund from the Department for the Economy

Nora Smith, CEO, CO3

Reacting to the news of a £40 million Hardship Fund from the Department for the Economy, Nora Smith, CEO of CO3 said:

“Whilst we welcome news of a Hardship Fund, the devil will be in the detail in terms of whether or not our members can access this. To date most of them have not been able to access any financial relief despite the fact that our sector employs around 45,000 people and contributes £1.5billion to the local economy.

“The fund may be able to help a small number of charities and social enterprises and we await the detail to find out if this is something they can access in the absence of anything else.

“There are a significant proportion of charities that depend on public fundraising which has fallen off a cliff since lockdown measures were introduced. There are also a range of members who may not be eligible because of their size but are not able to access any of the financial support to date.  It is therefore crucial that the Executive urgently come forward with a targeted funding package for the third sector that will alleviate financial pressures facing charities and social enterprises.”

Opinion: Citizens must be protected from massive consequences as Councils on the brink writes NILGA Chief Executive, Derek McCallan

During both Friday’s NILGA 11 council virtual meeting and then a further engagement with the 11 council chief executives, it is clear that local government’s response to Covid-19 has saved lives, kept essential public health services going and brought together extraordinary community and business partnerships at local level everywhere, but at a massive cost.

To say the situation facing councils is perilous is an understatement.

NILGA has, together with all councils and their senior officer teams, presented the short and long-term finances required to keep councils open beyond the summer to the Treasury and to Stormont.  The Covid 19 response by councils from March to June has over £40 million invested in it, money that is simply irretrievable as income losses alone sit at £30 million.

A non-payment of domestic and business rates, forecast at 25% by many English local authorities and yet to be determined here, would lead to around £175 million of income obliterated.

Taking these things together, when you consider the budget of about £800 million for local government annually, a small amount of the NI Public sector budget of over £23 billion, you realise that this model is unsustainable.

It is heartening to hear and read letters of support from Ministers, the public and councils’ many partners. However, this must transfer into cash, on the same proportionate basis as English, Scottish and Welsh councils, in what is called “Consequential Losses”.

Consequences means talking about impacts – which are massive. As a citizen, imagine no or reduced public health, planning, regulatory, community development, business support, leisure and wellbeing, preventative health, sports and local cultural funding stopping or being drastically cut. Recovery would be halted. Emergency provisions would be called for. We have had enough emergencies. This emergency can be avoided with funding.

Consequences means, also, rewiring how we do business – not just in councils, but as NILGA has reiterated since the new councils formed in 2015, establishing a completely new model of resource distribution of our entire public purse, because the institutions providing them are far, far less important than the people delivering and the people receiving these services.  

We will need a transformed public sector and councils are part of the solution, but only if brave, radical, decisions leading to cash for councils to survive is provided. Because communities need reassurance like public services security at this time, and government depends on local authorities to be the hubs of these communities, drawing on their information to make better decisions based upon local need.

Since the new councils were formed almost exactly 5 years ago, our colleagues in Stormont could not legislate in any substantial way for 3 of them. Thank goodness we have a Legislative Assembly operating, but now we must sustain the 11 councils, which kept Northern Ireland locally governed amidst a different type of crisis altogether.   

It is time to be brave, to transfer resources and challenges via councils to local people and places, but they too will change, beyond the emergency financial planning all 11 are engaged in right now.

I believe that Northern Ireland’s public services, government departments and the 11 councils have innovative, change ready, committed, entrepreneurial people at every level, capable of delivering radical change. We must unlock that talent, sit down with community and business leaders too, on an East – West and North – South basis and co-design our recovery.

Neither politics nor bureaucracy, neither silo budgets nor short termism should be barriers.

The heroes in our health service and other front-line workers, and the public itself, deserve changes for the better, as well as hope. Investing in our councils, now, is not only the right thing. It will make recovery happen faster and provide the hope we all need in a secure, effective, local democracy.

There is no time to waste.  

Londonderry Chamber calls for greater business support as economy begins to plan ahead

Paul Clancy, Chief Executive, Londonderry Chamber

More support and guidance are needed for businesses to ensure they are fully prepared for the reopening of the economy, the Londonderry Chamber of Commerce has warned.

Chamber Chief Executive Paul Clancy expressed the concerns of local businesses in a call with Northern Ireland Office Minister Robin Walker MP, Minister for Business and Industry Nadhim Zahawi MP, and Economy Minister Diane Dodds MLA on Tuesday.

Mr Clancy said greater co-operation and a more synchronised approach is needed across the UK and Ireland, especially for businesses in the North West which trade and operate across the border.

Mr Clancy also emphasised to the Ministers the importance of a carefully managed return to normality with procedures like phased returns of offices and workplaces and altered work environments to allow adherence to social distancing rules.

Paul Clancy, Chief Executive, Londonderry Chamber, said:

“I welcomed the opportunity to engage with Ministers from both Stormont and Westminster this afternoon and particularly the news that there will be a £40m Hardship Fund for those microbusinesses who have not yet been able to access support.

“I expressed the serious concerns of the business community in the North West over the reopening of the economy as the government draws up plans for exiting the lockdown. The restart of the economy must be carefully managed and responsibly phased to ensure it can fully recover, to protect workers and the wider public, and to avoid having to shut down again, a measure which would simply decimate our regional economy.

“As an economy which is heavily reliant on cross border trade, North West businesses need to see greater co-operation and a more synchronised approach between Northern Ireland, the rest of the UK and the Republic of Ireland. It is very confusing and frustrating for businesses which operate on both sides of the border to see one set of advice and a detailed relaxation plan in Donegal, but another set of guidelines and less clarity in Derry. Businesses need to see light at the end of this tunnel, and I am urging the Executive to urgently publish its lockdown relaxation plans.

“I am also very concerned that the Coronavirus Job Retention Scheme for furloughing workers is closing at the end of June. The government must ensure that there is no cliff-edge situation which leaves businesses with no other choice but to lay off their workers. For the economy to bounce back, everything must be done to ensure jobs are saved and businesses are kept afloat. Hundreds of local businesses, especially those in sectors like retail, hospitality, and tourism, will need a furloughing scheme of some description extended well beyond June and the summer.

“Protecting the health of workers and preventing the further spread of this virus will be the number one priority for companies as we return to normality. Firms will need to implement new social distancing measures in the workplace as well as significantly altering their work environments. However, this will come at a substantial cost to small businesses and financial support will be required from the government to ensure health and safety advice is fully adhered to. If the government is expecting companies to reopen and get back to work, greater support and clearer guidelines are urgently needed to allow companies to do this safely.”

Laying the foundations for recovery – a light touch approach by Matthew Howse, Partner, Eversheds Sutherland in the Irish News

Matthew Howse, Partner, Eversheds Sutherland Belfast

As each day passes, the economic challenges presented by COVID-19 are further illuminated. With the jobs retention scheme portal now open for applications, many businesses and employers will be hoping that there is some light at the end of the dark tunnel they are currently in. Specifically, they will be hoping that they promptly receive funds from HMRC in the coming days in order to fulfil payroll obligations and ease any immediate cashflow concerns. 

There is no doubt that many local businesses are facing increasing creditor pressure across a range of sectors, with funders and the UK government fiscal stimulus packages endeavouring to provide support to those businesses where possible. However, the economic impact of the crisis cannot be underestimated and will need to be addressed in a manner which is appropriate to each business which encounters irreversible difficulties.

An option which may be necessary for some is administration. Yet, a commonly held misconception is that a company entering into administration has entirely ‘collapsed’ rather than the process being viewed as one which, if used appropriately, can stabilise and restructure a company in a manner which provides a positive outcome for a range of key stakeholders.

The most recent administration of Debenhams is a high-profile example of what has been dubbed the “light touch” approach being implemented in an effective manner. Up until now, the administration process typically has led to the incumbent management team of the business handing over control of the company’s affairs to the appointed insolvency practitioner. However, in certain circumstances an appointed administrator may decide to authorise the existing directors to retain and exercise certain management powers held by them prior to the administration taking effect. If used wisely, this can be hugely beneficial.

However, there are pros and cons to consider. If the primary objective of rescuing the company in question is the principal driver for the administration process, retaining director involvement and their inherent knowledge of the business coupled with the expert guidance from an appointed insolvency practitioner could provide a favourable result in seeking to achieve that objective. This approach can also assist with keeping costs down in a particularly costs sensitive environment.

On the other hand, from a practical perspective, insolvency practitioners will be conscious of not handing too much power back to directors given the inherent risk of those delegated powers being abused, or innocently mishandled. Furthermore, if a company already holds a significant level of impaired debt prior to the COVID-19 crisis, the use of a “light touch” approach is unlikely to be appropriate to alleviate that position.

The director general of the CBI, Dame Carolyn Fairbairn, has spoken of the workout for the COVID-19 crisis requiring a three-phase response of restarting, reviving and renewing the economy. A wider implementation of “light touch” administrations in the correct set of circumstances, and within the correct parameters, may form an integral part of that response. However, the success of the approach will rely heavily on buy in from a company’s funders, other key stakeholders and the value of the skillset of the existing management team in order to successfully navigate the challenges faced.