PPF could collect £160m more than target due to risk-based buffer

Lane Clark & Peacock partner Nick Curry said if the extra money was kept by the lifeboat fund it would "add insult to injury" to the hike in the scaling factor used to work out the final cost of the risk-based levy.

He said: "Due to the buffer of 0.87 the PPF have included in the scaling factor they could end up with the embarrassment of collecting closer to £837m than their target of £675m.

"This is because 0.86 of the increase in the scaling factor was due to companies improving their Dun & Bradstreet failure scores between October 2007 and March 2008. There may not therefore be much scope left for companies to appeal their failure scores when they receive their levy invoices.

"Only a small amount of the buffer might therefore be used. The final scaling factor thus appears to include an element of double counting."

He added: "Many schemes are experiencing a doubling in levy payments. It is clear they are not happy about that. To find out that affected schemes are going to be charged more than the PPF said obviously adds insult to injury.

"This hardly seems fair bearing in mind that many would have taken additional steps to reduce their levy if they had known what the final bill was going to be.

Curry said one of LCP’s clients is reviewing its scheme because of the increased levy bill.

"This has been very bad news for some clients," he added.

A PPF spokeswoman said: "In order to collect our levy estimate, it is prudent for us to build in an allowance for any successful appeals that companies make about their insolvency scores.

"Historically we know that schemes do appeal their scores. In fact already more than 80 schemes have appealed their 2008-09 D&B score."