The Insolvency Service has revealed that it will write off £81.3m of taxpayers’ cash, to reflect fees that cannot be collected and the effects of the recession.

In its annual report and accounts for 2010 to 2011, published today, the service reveals that the sum reflects "fees that we no longer expect to be able to recover as a result of the accumulated effects of the credit crunch and the recession."

The service has been hit hard both by the declining values of assets in insolvency estates and fewer assets held within those estates.

In his introduction to the accounts, Insolvency Service chief executive Stephen Speed says that the 12 months covered in this latest report were "perhaps the most challenging in the service's 21-year history".

The organisation adds that the impact of the write-off to the taxpayer should be seen in the "context of the service’s business since the fees regime came into being in 2004."

It says that the £81.3m includes £21.3m of fees not yet recovered on cases between April 2004 and March 2007, which have already more than covered their costs and were therefore in surplus.

The Insolvency Service also said that it is offsetting against the write-off £22.5m of deferred income from surpluses on cases before...More on this Story: Credit Today online