Weekly Blog by Philip King, CEO of the ICM - 'Change the insolvency landscape'

I've spent a good deal of time over the last few days reading and reviewing the Insolvency Service's 'Consultation on Reforming the Regulatory Framework for Insolvency Practitioners' which has been produced following the OFT Market Study into Corporate Insolvency published last June.

It's large document (c90 pages), so not an easy read but nevertheless vitally important for credit professionals. Indeed the press release that accompanied the launch highlights a principal objective of the consultation in considering ' the three main issues to address the problems associated with the weak position of unsecured creditors.'

When I'm out and about, our Members and those in the credit community frequently complain to me about the insolvency process and how they lose out. This then is our opportunity to influence the insolvency landscape of the future. If we ignore it, we do so at our peril, and to this end the ICM will shortly be issuing a survey that will enable anyone interested to give their opinion and comment on aspects of the paper that are relevant to them. Please take the time and trouble to allow us to take your thoughts and feedback into account when we produce our final response to Government.

Elsewhere I see that David Kern, Chief Economist at the British Chambers of Commerce has reacted to the recently published minutes of the Monetary Policy Committee http://bit.ly/h77WrS. He's absolutely right when he says '...the factors pushing up prices in the short-term are outside the MPC's control...' Raising interest rates now would be too soon and would damage the prospects for recovery.

Finally, I'm writing these words ahead of the ICM's Regional Roadshow at the National Motorcycle Museum in Birmingham which has the highest number of registrations yet for our Roadshow programme. To find out more about our Roadshows and when we're going to be near you visit: http://www.icm.org.uk/default.asp?edit_id=1286-56

Weekly Blog by Philip King, CEO of the ICM - 'Sound bites aren't enough'

Amid the hype around Project Merlin and the banks last week, the announcement from BIS of four new schemes http://bit.ly/gglodF specifically to help exporters seems to have got somewhat lost in the noise.

On the face of it, all four of the schemes have merit. They are designed, in simple terms, to enable businesses greater access to trade finance and insurance against credit risk where such help may not be available from the private sector.

As always with such initiatives, the devil is in the detail which I fear the headline announcement masks. It seems the circumstances in which the schemes will be available are limited, and the benefits will - in turn - also be restricted to a few rather than the many. Previous forays by government to support exporters have not been spectacularly successful; they have tended to be overcomplicated, and as a result, under-subscribed.

Export growth is crucial in the recovery we so desperately need, and schemes like these need to be visible, understood, and used; they need to be simple and easy to apply for; and they need to be flexible so their impact is maximised. The intention is laudable, and I don't want to write these off just yet. But there is a tendency for government to fail in its follow-through, and this time they need to listen and respond positively and quickly to feedback so the objectives of driving exports and aiding economic recovery in the UK can be met.

Businesses don't grow through sound bites. Behind the rhetoric, there need to be real and tangible measures of support.

Weekly Blog by Philip King, CEO of the ICM - 'Forced lending - no, no, no!'

So Britain's largest banks have finally signed up to a series of pay and lending reforms http://tiny.cc/sbhgo, and whilst I don't especially want to add to the exhaustive comments made before and since the announcement, I was rather captivated by the interview with Vince Cable on Radio 4's PM.

The interviewer, Eddie Mair, was making the point forcibly that the Government has no real power as a result of the agreement and still won't be able to 'force' the banks to lend to small businesses. We know ourselves that the banks' record at supporting businesses is not as good as it is claimed to be, and getting the top level thinking down to local management is similarly not as effective as it might be. We know also that SMEs are not as good at producing credible business plans to support requests for funding as they should be, nor as good at collecting cash due to their businesses as they need to be.

But more than this: we know that the Government doesn't deliver initiatives in a way that makes them easily understood by business, and its follow-through is usually poor; and there is a disconnect between the views of the small business organisations and the views of the banks about the reasons and causes of the funding availability issues.

And yet despite all this, please don't tell me that the banks should be forced to lend to small businesses.

Yes, encourage them to understand their small business customers better and provide them with best advice. Yes also be supportive and imaginative in the help they can provide. But force them to lend? NO, NO, NO

I have seen several examples where a bank's refusal to lend appears to lack logic, and they have made unreasonable and unacceptable demands of their customers. But I have also seen small businesses that are clearly in terminal decline, blaming the banks for their woes when it's obvious that lending more money would only have delayed the inevitable insolvency.

Please let's make sure we don't forget the basic principles of good credit management - you don't lend more than a customer can afford to repay and you drive profitable sales while protecting your business against unnecessary and avoidable risk.

Weekly Blog by Philip King, CEO of the ICM - 'Debt management - we need disclosure'

The OFT made an announcement last week that followed its warning to 129 debt management firms in September last year that highlighted serious issues over compliance.

It confirmed that 35 firms have surrendered their consumer credit licences and at least 15 are facing licensing action as a result of the OFT's compliance review. In detail, since the warning was issued: 35 firms have surrendered their licences; 8 firms have been informed that the OFT intends to revoke their licences; a further 7 companies who did not respond are currently being investigated; and 79 firms have submitted evidence, which the OFT will now review.

One of the footnotes to the official news release says that: 'the OFT is not able to name the companies subject to the announcement because of disclosure restrictions under Part 9 of the Enterprise Act 2002. Where the OFT uses its formal powers under the Consumer Credit Act 1974 to refuse or revoke a credit licence, decisions are made public on the Public Register'.

I understand the principles of disclosure but it seems to me perverse that the public cannot know the names of the companies involved so that they - and their advisers - can be wary of dealing with them, particularly where the OFT plans to revoke a licence. It has now been four months since the initial announcement, which means at best there are still many debt management companies behaving unethically or worse. (By the way, I thought I'd look at Part 9 of the Enterprise Act to see what the restrictions were and I'm still ploughing through the 18 pages of guidance notes!)

To more positive news, I am delighted to see our Managing Cashflow Guides passed 200,000 downloads in January. I appreciate there are an estimated 4.7 million businesses in the UK but at least a proportion of them are downloading good advice that can help them manage cashflow more effectively.