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Item 5 is a legislative consent memorandum on the Enterprise and Regulatory Reform Bill, which is United Kingdom legislation. The details have been circulated to members. This is a fairly technical measure in relation to the use of information technology in connection with insolvency. Does anybody have any comments?
We have responsibility for receiverships in Scotland. Is that right?
I think that that is right.
I have not got the detail of the bill, about which I have no general concern, but I am a bit concerned about what is to be done with regard to the LCM.
Paragraph 6 of paper 7 makes it clear that this does not apply to receiverships in Scotland, so I do not think that you need to be concerned about the LCM in that regard.
Paragraph 6 states that the LCM will
Surely that is the point of the LCM.
Sorry. I was talking complete rubbish there.
Yes, you were.
And, before you say it, not for the first time. However, you are absolutely right that it applies to receiverships.
Is that not why we have an LCM?
Yes.
I am just expressing a concern about it.
The point of it is to allow continuity of IT services for companies that go into receivership, which makes perfect sense to me. The IT services are necessary for what the receivers or liquidators may have to do, particularly when people now store data remotely on the cloud and so on. As soon as the plug is pulled on the IT, the whole company and all history of it evaporates, so I think that what the LCM proposes makes absolute sense.
Until it turns up as another new company the week after.
Possibly, but it is vital to maintain the IT connection.
It has just been pointed out to me that receiverships as a tool are being phased out as a consequence of the Enterprise Act 2002 and that the number of receiverships is continuing to reduce year on year. During the financial year 2011-12, there were only 35 receiverships in Scotland and for the three quarters reported so far for 2012-13, there have been just 24 receiverships. Only a small number of companies are affected by the LCM.
No. I am quite happy with it.
Is it not the case, though, that receiverships are used for quite big companies with lots of money at stake?
As a consequence of the 2002 act, administration is now being used as a tool much more regularly than receivership is. We are seeing a trend of receiverships becoming a much less frequent occurrence in the framework.
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