Statutory Debt Solutions in Scotland by Local Authority: 2015/16

1. Introduction

This report provides information on statutory debt solutions in Scotland at the local authority area level in 2015/16 and compares them to the previous financial year.

It breaks down the rates per 10,000 adult population of bankruptcies, Protected Trust Deeds (PTDs) and Debt Payment Programmes (DPPs) under the Debt Arrangement Scheme (DAS) for every local authority area during 2015/16. This rate provides a representative picture of the concentration of bankruptcies, PTDs and DAS in Scotland. Single age population estimates for each local authority are taken from the National Records of Scotland mid-year estimates.

Several elements such as access to debt advice, social perception of debt or ease of access to credit can affect the uptake of the statutory debt solutions covered in this report.  Consequently, the figures presented in this report cannot be regarded as evidence of the level of indebtedness or economic performance in any particular Local Authority.

TERMS

Bankruptcies –   

Bankruptcy is a formal method of dealing with debts if other options have failed or aren’t suitable for the debtor’s circumstances. Being declared bankrupt means the debtor has to hand over their estate to a trustee. More+

PTD

A protected trust deed is a voluntary arrangement, where an agreement is made between a debtor and creditors to repay part, or all of their debt. The debtor conveys his estate to an insolvency practitioner to administer for the benefit of creditors and the arrangement normally includes a contribution from income for a set period.  Provided the debtor complies with the terms of their deed, the creditors can take no further action to pursue the debt or to make the debtor bankrupt. This is similar to Individual Voluntary Agreements in England and Wales; although there are important differences in the way they are set up and administered.  More+

DAS DPP –

Debt Arrangement Scheme (DAS) is a Scottish Government debt management tool administered by AiB.  DPPs approved under DAS allow individuals to repay their debts in full over an extended period of time whilst providing protection from enforcement by their creditors and safeguarding their home as long as mortgage payments are maintained. The legislation relating to DAS is contained in the Debt Arrangement and Attachment (Scotland) Act 2002 and subsequent regulations.  More+

Adult population -  

The total population of a region aged 16 or over

Rate per 10,000 adults –

The specific number of statutory debt solution divided by the number of people aged 16 or over, multiplied by 10,000.

The number of bankruptcies awarded, PTDs registered and DAS DPPs approved can be broken down by local authority, based on the applicant’s postcode at the time of sequestration, registration of the PTD or DAS approval. There is a small number of missing or incomplete postcodes that have not been matched to the national Records of Scotland postcode tables. The annual missing or incomplete postcodes account for a maximum of only 1.12 per cent of bankruptcies in 2014/15.  The figure is lower for other products.

The quarterly number of statutory debt solutions as well as the rate per 10,000 adults in each local authority for 2011/12, 2012/13, 2013/14 and 2014/15 have also been provided for comparison in the associated document.  

2. Bankruptcy - 2015/16

  • The rate of bankruptcies per 10,000 adults in Scotland was 8.44 in 2015/16; 44.22 per cent lower than the previous financial year.

  • The lowest bankruptcies rates were in the island council areas and East Dunbartonshire.The local authority with the lowest bankruptcy rate was Orkney Islands (2.75), followed by Shetland Islands (3.17).

  • West Dunbartonshire was the local authority with the highest rate of bankruptcies per 10,000 adults. West Dunbartonshire has had the highest bankruptcy rate for each of the last five financial years.The bankruptcy rate in West Dunbartonshire was 6 times higher than that in Orkney Islands.

  • The bankruptcy rate per 10,000 adults decreased in all 32 local authorities. The local authority with the largest bankruptcy rate percentage decrease was Renfrewshire, where the bankruptcy rate decreased by 62.9 per cent from 17.33 in 2014/15 to 6.43 in 2015/16.

3. Protected Trust Deeds (PTDs) - 2015/16

  • The rate of PTDs per 10,000 adults in Scotland increased to 10.56 in 2015/16 from 10.00 in the previous financial year.

  • West Dunbartonshire was the local authority with the largest rate of PTDs per 10,000 adult population, followed by South Lanarkshire.

  • Na h-Eileanan Siar and Orkney Islands were the local authorities with the lowest rate of PTDs per 10,000 adults. Na h-Eileanan Siar was the local authority with the lowest rate (2.64) of PTDs per 10,000 adults. This was four times lower than the average rate in Scotland.

  • The local authorities with the largest rates of PTDs per 10,000 adult population tended to concentrate in the central belt.East Dunbartonshire and City of Edinburgh were the only local authorities with a relatively low PTD rate within the central belt.

  • The PTD rate increased in 24 of the 32 Local Authorities in 2015/16 as compared with the previous year. The largest PTD rate percentage increase was Orkney Islands which increased from 1.66 in 2014/15 to 4.40 in 2015/16.

4. Debt Arrangement Scheme (DAS) - 2015/16

  • The rate of DAS DPPs per 10,000 adult population in Scotland was 4.58 in 2015/16, half of the rate of previous financial year.

  • Fife was the local authority with the largest rate of DAS per 10,000 adults. The Fife rate (7.76) was 69.43 per cent larger than the national average.

  • The lowest DAS rate was in Na h-Eileanan Siar (0.88), which was almost 9 times lower than Fife. Na h-Eileanan Siar, Shetland Islands and Orkney Islands had fewer than two DAS approvals per 10,000 adults.

  • The DAS rate per 10,000 adults decreased in all 32 local authorities. The local authority with the largest decrease in DAS per 10,000 adults was Na h-Eileanan Siar. Na h-Eileanan Siar’s DAS rate decreased 88.84 per cent from 7.89 in 2014/15 to 0.88 in 2015/16. The lower decrease (10.54 per cent) was in Argyll & Bute.
     

5. Background

5.1 General background 

AiB supervises all personal insolvencies in Scotland and administers those bankruptcies where appointed as trustee. Insolvent individuals in Scotland are subject to bankruptcy (sequestration) or enter PTDs under the Bankruptcy (Scotland) Act 1985 (the 1985 Act).  The 1985 Act was amended by the Bankruptcy (Scotland) Act 1993 and on 1 April 2008, part 1 of the Bankruptcy and Diligence etc. (Scotland) Act 2007 came into force making changes to some aspects of bankruptcy in Scotland. Changes included the introduction of LILA, a route into bankruptcy for people with low income and low assets. The changes also took a number of processes out of the Scottish court system, reducing costs and freeing up court time.

There were a number of changes to in the personal insolvency landscape in Scotland through the introduction of the Bankruptcy and Debt Advice (Scotland) Act 2014 (BADA(S)) which came into force from 1 April 2015 and amended the 1985 Act. A new route into bankruptcy was introduced through the BADA(S) for people on low income who do not own property and have very little in savings or other assets. This is known as Minimal Asset Process and it replaces the previous Low Income Low Asset route to bankruptcy.

A PTD is a voluntary arrangement, where an agreement is made between a debtor and creditors to repay part, or all of their debt. The debtor conveys his estate to an insolvency practitioner to administer for the benefit of creditors and the arrangement normally includes a contribution from income for a set period.  Provided the debtor complies with the terms of their deed, the creditors can take no further action to pursue the debt or to make the debtor bankrupt. This is similar to Individual Voluntary Agreements in England and Wales; although there are important differences in the way they are set up and administered. 

DAS is administered by AiB.  DPPs approved under DAS allow individuals to repay their debts in full over an extended period of time whilst providing protection from enforcement by their creditors and safeguarding their home as long as mortgage payments are maintained. The legislation relating to DAS is contained in the Debt Arrangement and Attachment (Scotland) Act 2002 and subsequent regulations.

Further information on DAS, including a register of debt payment programmes, is available at http://www.dasscotland.gov.uk

Further information regarding insolvency in Scotland, including legislation, can be found on the AiB's website at www.aib.gov.uk

5.2 Statistics background

Official statistics are produced by professionally independent statistical staff. Further information on the standards of official statistics in Scotland can be accessed at http://www.scotland.gov.uk/Topics/Statistics/About

5.2.1 Data sources

The Statistics for individual insolvencies (Bankruptcies and PTDs) and DAS are derived from administrative data of records processed within AiB and stored on the systems BASYS, ASTRA and DASH respectively. The exception to this is creditor and trustee petition bankruptcies which are sourced from the courts that grant them and subsequently stored on the BASYS system.

Extracts from these records, including postcode, date of insolvency or date of DPP approval are taken to derive the breakdowns used in this publication.

Methodology

Figures are produced from tabulation of raw data from relevant administrative systems for the number of Bankruptcies, PTDs and DAS DPPs.

The numbers of personal insolvencies reported are based on the date the court order or agreement of the insolvency procedure; similarly, the numbers of DAS DPPs  DAS are based on the date the DPP was approved.

Postcodes are matched against the National Records of Scotland Postcode Directory, to determine the local authority of each debtor. This is then aggregated to produce counts of insolvencies in each geographical area.

Insolvency and DAS DPPs rates are based on the latest mid-year population estimates for the reference year at the time of publication.

Revisions

Revisions made are usually as a result of data being sent to AiB and logged on to the administrative systems after the cut-off date for extraction from the systems to produce the statistics.  AiB postponed the publication of this report until August in order to present a representative number of the statutory debt solutions recorded in the system in the latest financial year. 

Insolvency rates are annually revised, as a result of revisions to the underlying population data published by the National Records of Scotland. Numbers of insolvencies and DAS DPPs in each Local Authority for previous financial years are unchanged.

Where ad hoc revisions are made for any other reason, these revisions will be highlighted in the table and reasons for any revisions will be given in the text. More information on the revision policy can be requested from AiB.

5.2.2 Quality

Relevance

The statistics produced by AiB are the most complete record of the number of debt relief and debt management products in Scotland.

Key users of AiB’s insolvency statistics are AiB itself (which has policy responsibility for personal insolvencies in Scotland), the insolvency profession, local authorities, debt advice agencies, media organisations, academics, creditors and the general public. 

The statistics team welcomes feedback from users of these statistics (current contact details are provided at the end of this report).

 

Accuracy and Completeness

All formal insolvency procedures entered into by an individual are required by law to be reported to the appropriate body, so the statistics should be a complete record of insolvency in Scotland at the time of publication.

The numbers of bankruptcies, PTD and DAS DPPs are based on the date of the order, agreement of the insolvency procedure or the approval date. They are not based on the date it was registered on the administrative recording system.

Individual insolvencies and DAS DPPs have been classified into geographic areas on the basis of the postcode supplied by the individual. The most recent address is used to classify the debtor's location. As some postcodes supplied are missing or incomplete, or have not matched the National Records of Scotland Postcode Directory, some individuals have not been matched to geographic areas. The missing or incomplete postcodes have not been matched to a local authority area and have therefore been excluded from individual local authority figures. However, these cases have been included in the overall Scotland totals and rates.

Checks are in place to identify and remove duplication of cases when extracting data from the administrative systems, to ensure that returns cover all debt management solutions, and to check consistency within tables and between related tables.

 

Coherence

When producing statistics by local authority, numbers may differ slightly as postcodes of debtors cannot always be assigned. Where this occurs these differences will be highlighted and commented on.

The statistics represented in this report may not be consistent with figures previously published in the Accountant in Bankruptcy (AiB) annual and quarterly statistics reports as they have been extracted from a live database at a different point in time and therefore subject to slight variance. Annual and quarterly statistics reports are the definitive source of statistics for statutory debt solutions in Scotland.

 

Timeliness and Punctuality

This report is published in August and the latest data relate to the financial year 2015/16. This publication date should allow receiving of the majority of data inputs, and sufficient time for quality assurance the data extracts, tabulating records and completing the compilation of the statistical release in the publication format.

 

Accessibility and Clarity

The Scottish Insolvency Statistics are available free of charge to the end user on the AiB website. They are released via the website and ScotStat.

Contact details can be found at the end of these background notes for any specific requests on the data.

Comparability

Changes in legislation and policy can affect the extent to which comparisons can be made over time for individual data series. Where such changes are known, they have been highlighted in the general background notes.

Further information on the historical trends of the statutory debt solution in Scotland can be found on the Annual and quarterly statistics reports.

AN OFFICIAL Statistics publication FOR SCOTLAND

The figures released today were produced in accordance with professional standards set out in the Code of Practice for Official Statistics; they undergo regular quality assurance reviews to ensure that they meet customer needs.

Correspondence and enquiries

For enquiries about this publication please contact:

Francisco Forner Borras,

Accountant in Bankruptcy,

Telephone: 0300 200 2927 (Kilwinning) 01414 278 7406 (Glasgow)

e-mail: Francisco.Forner@gov.scot

For general enquiries about Scottish Government statistics please contact:

Office of the Chief Statistician, Telephone: 0131 244 0442,

e-mail: statistics.enquiries@scotland.gsi.gov.uk

 

How to access background or source data

The data collected for this statistical bulletin:

☐ are available in more detail through Scottish Neighbourhood Statistics    

☒ are available on the AiB Statistics webpages at:

https://www.aib.gov.uk/about/statistics-data

Details of bankruptcies, PTDs, liquidations and receiverships can be found on the Register of Insolvencies, which is maintained by Accountant in Bankruptcy and can be accessed at https://roi.aib.gov.uk/roi/

The DAS register is an online public register which holds information about those who have a DPP under DAS (https://services.aib.gov.uk/dasregister/)

☐ may be made available on request, subject to consideration of legal and ethical factors.

☐ cannot be made available by Scottish Government for further analysis as Scottish Government is not the data controller.    

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