The decision follows a consultation in 2021 which proposed a single watchdog to strengthen monitoring of the insolvency sector. However, following feedback from professional bodies and stakeholders about costs and disruption to the insolvency profession, the Department for Trade and Business (DBT) has confirmed that it will not change the current monitoring regime due to potential conflicts of interest, the costs of setting up a new body and potential conflicts of interest.

The government has now confirmed that it will not set up ‘a single independent regulator to sit within the Insolvency Service, replacing the current system of using recognised professional bodies’.

Respondents to the consultation criticised plans to set up a new regulator within the Insolvency Service as it would not be independent and would become 'judge and jury' by setting the standards for the profession, regulating the profession, and disciplining misconduct.