The Insolvency Service is set to make 50 jobs cuts during the current financial year, as the government agency struggles to tackle a deficit that may hit £7m.
The cuts will affect Level 1 examiners who deal with the simplest bankruptcies, where individuals have petitioned for themselves to go bankrupt.
The Insolvency Service said these tend to be consumer bankruptcies rather than self-employed trading bankrupts. Level 1 examiners do not investigate offences.
No other roles are affected but employees have been told about the possibility of another, separate, limited voluntary exit scheme.
In a memo to staff leaked to Credit Today Dr Richard Judge, chief executive of the Insolvency Service, explains that the job reductions will be targeted in areas of over-capacity.
The memo states: “We have launched a process that tackles over-capacity of L1 examiners and that includes a voluntary redundancy scheme. This is a consequence of the continuing fall in case numbers. It is something that has been considered for a while.
“This is not a decision that has been taken lightly. It is the first time the service had had to undertake a redundancy scheme. However, it is an unavoidable part of tackling our deficit and of responding to reduced demand for our OR (official receiver) services as cases fall.”
Level 1 examiners are now being invited to apply for a post at their grade. By 7 December their applications will have been assessed by a panel and around 45 to 60 of 172 examiners will be declared surplus.
A voluntary redundancy scheme will be available from January 2013.
The memo adds: “Although we will try hard to avoid compulsory redundancies, I cannot rule this out at this stage.”
The Insolvency Service has assured staff that they will be given help to find jobs across government.
An Insolvency Service spokesman said: “We are seeking to reduce numbers by voluntary means. And, we will do all we can to avoid compulsory redundancies but can’t rule it out at this stage.
“The decision has been taken because there are about 45 to 60 surplus staff at that (Level 1 examiner) level, following a reduction in the number of debtor petition bankruptcy cases that the service is dealing with. There are currently around 170 Level 1 examiners in the service.”