Another Insolvency Service “crackdown” makes the morning bulletins. Over 1,000 directors disqualified in 2024–25; £47bn pushed out under Bounce Back Loans; billions lost to fraud, according to government updates. It’s a tidy story - greedy directors, tough enforcement. In workshops from Sheffield to Salford, the real question is who ends up paying.

Look under the bonnet and a different picture emerges. The scandal isn’t only that some directors misused COVID-era cash; it’s that the system built to protect the economy turned into a closed loop that pays the very insiders now presenting themselves as the clean‑up crew. As ever, follow the money, not the press release.

Start with the Bounce Back Loan Scheme. By May 2025, official figures showed more than 114,000 loans tied to companies that have since been dissolved or liquidated. Those firms didn’t just vanish; most were processed through the insolvency pipeline - a route run by insolvency practitioners who earn fees each time a company collapses.

Liquidators and administrators are paid from whatever is left in the pot - and if that’s empty, the state guarantee steps in. More liquidations mean more billable hours. Meanwhile, the Insolvency Service applauds itself for “taking action”, even as its enforcement work feeds the same ecosystem it polices.

On paper, the Investigations and Enforcement Strategy 2026–2031 promises tougher action on loan abuse and avoidance. In practice, the results jar. The Times reported the National Investigation Service recovered only £7m from £1.9bn in suspected COVID-loan fraud before being scrapped as ineffective. Yet the director‑ban press releases keep coming, tidy headline management without meaningful accountability.

The moral mirage around BBLS needs stating plainly. The scheme steadied the financial system first and foremost. With a 100% state guarantee, lenders faced minimal downside and were paid to lend at speed with light checks on affordability. When the businesses failed, the taxpayer picked up the tab.

Now many of the same lenders and insolvency outfits are hired to chase recoveries and investigate failures. It resembles a circular economy of reward: guaranteed fees and safe balance sheets for institutions; write‑offs for the public purse; and years of fallout for local employers and their staff.

October 2025 brought a headline‑friendly seven‑year ban for two sisters over an “insolvency avoidance” model. Yet phoenixing, asset shifts to fresh companies and slick “rescue” outfits still operate in plain sight. They keep cash moving, keep practitioners busy and give ministers a story to tell - all without fixing a legal framework that invites repeat failure.

In plain English: insolvency practitioners earn from estates or taxpayer guarantees. Big banks extended state‑backed loans with little risk and were reimbursed for losses. Government trumpets four‑figure disqualification totals while recovering little. Small directors - many acting in survival mode during the pandemic - are fined, banned and blamed, while larger players walk on by.

What would feel fair across the North? Publish recoveries, fees and outcomes by region and by lender. Make enforcement proportionate, with a way back for honest errors. Put lender accountability and director education on the same footing as punishment. Until then, the headlines will keep coming - and the bill will keep landing on Northern doormats.