Scottish Government
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Agency cuts cost to public

The AIB cost the public purse 25 per cent less for its services in 2008-09 - despite dealing with more cases.

The agency's Annual Report for 2008-09 demonstrates that it has reduced its reliance on Government funding through more effective methods of recovering operational costs from its service users - one of the key aim's of the agency's Business Plan for the year.

Key facts and figures from the Annual Report include:

  • The cost to the public purse has reduced from £6.895 million in 2007-08 to £5.185 million in 2008-09
  • The number of bankruptcies in 2008-09 was 14,177, an increase of 140 per cent on the figure for 2007-08 (6,158). This increase can be largely explained by the introduction in April last year of a new route into bankruptcy - the Low Income Low Asset (LILA) route
  • Protected Trust Deeds (PTDs) also rose marginally by 1.7 per cent to 7,633 registered PTDs
  • Under the Debt Arrangement Scheme (DAS) the number of Debt Payment Programmes (DPP) received almost doubled to 939 (from 470 in 2006-07)
  • Consignation funds held also increased for 2008-09, with a 50 per cent rise on 2007-08 to £17.322m. AiB have invested in technology to allow the Agency to identify the creditors to repatriate these funds and reduce the need to consign funds in the future

Welcoming the report, Minister for Community Safety Fergus Ewing said:

"This Report clearly evidences the AiB's success in meeting the Government's commitment to achieving sustainability in public service delivery and greater efficiencies where needed most. To achieve such savings to the public purse while at the same time processing more cases and helping more people deal with debt is deserving of praise.

"These achievements are proof of the hard work and application of all the staff at the AIB office - and the strong leadership and drive provided by the Chief Executive Gillian Thompson, who is now standing down. We in the Scottish Government recognise her outstanding work.

"These improvements are in line with our aim to use technology more effectively to deliver faster and more effective results that benefits people and businesses in Scotland.

"It is no surprise that many families are facing severe financial problems in the current economic climate. However it is imperative that those who need help with debt get appropriate help. In some cases, bankruptcy may offer the best route towards debt relief. That is why the new LILA route into bankruptcy was introduced - not to make it easier for people to walk away from their responsibilities but to help remove the stigma often associated with such a move for those in greatest need.

"The increase in the number of DDPs is to be welcomed for it represents an increase in individuals and families receiving structured help in getting their finances back on track.

"There is no magic cure for anyone's financial woes. But there is help available and the Government and the AiB will continue to offer the best possible advice to those facing difficulty."

Accountant in Bankruptcy (AiB) is responsible for administering the process of Personal Bankruptcy and recording Corporate Insolvencies in Scotland. The Annual Report is available at

The LILA route into bankruptcy came into effect on 1 April 2008 provides individuals with no other means of accessing bankruptcy as a necessary means of debt relief.

A Protected Trust Deed is a voluntary agreement between a debtor and their creditors to repay part of what they owe. A PTD is binding on all creditors, meaning they can take no further action to pursue the debt or to make the debtor bankrupt.

The Debt Arrangement Scheme (DAS) is a statutory scheme run by the Scottish Government to help debtors to pay multiple debts by giving them more time to pay without hassle or threat of court action from their creditors. DAS freezes interest, fees and charges on their debts from the date the DAS payment programme is approved.

Consignations are monies belonging to creditors at the close of bankruptcies which has not been able to be paid by the trustee (both the Agency and private Insolvency Practitioners, including dividends from PTDs).

Consignation funds do not contribute to the recorded revenue of the Agency and do not contribute in any way to the Agency reduced reliance on Scottish Government funding.

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