Committee publication · Correspondence · 20 April 2026

Letter from the Permanent Secretary of HM Treasury to the Chair of the Public Accounts Committee relating to NAO financial audit insights 2024-25, 30 March 2026

Inquiry: NAO financial audit insights 2024-25

Summary

The Treasury Permanent Secretary responds to a Public Accounts Committee question about £452 million in redundancy payments written off by the Department for Business and Trade in 2024-25. He explains these are statutory payments to employees of insolvent companies, funded from the National Insurance Fund, with recoveries attempted through insolvency proceedings but limited in practice due to companies' insolvency status.

Key findings

£452 million in redundancy payments were written off by DBT in 2024-25, consistent with £455 million in 2023-24
Payments are made under Section 167 of the Employment Rights Act 1996 when employers become insolvent and cannot meet statutory redundancy obligations
The Insolvency Service's Redundancy Payments Service delivers payments from the National Insurance Fund and pursues recoveries through business insolvency processes
Recovery efforts are limited due to the insolvent status of companies, resulting in most payments being formally written off as expected losses

Tone

Factual

Topics

public-financeinsolvencyemployment-lawgovernment-spending

Key actors

James Bowler, Sir Geoffrey Clifton-Brown, Mr Betts, HM Treasury, Department for Business and Trade, National Audit Office, Insolvency Service, Public Accounts Committee

Notable line

“As the businesses are insolvent, recoveries are in practice limited. This results in most payments made being formally written off and recorded as a loss.”

Key Quotes

“… this relates to payments made by the Department for Business and Trade to employees whose employer becomes insolvent and is unable to fulfil statutory redundancy payment requirements.”
— James Bowler · Explaining the nature of the £452 million in redundancy payments

“As the businesses are insolvent, recoveries are in practice limited. This results in most payments made being formally written off and recorded as a loss.”
— James Bowler · Justifying why most payments are written off as losses

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Source · parliament.uk record ↗