In its response to the government's consultation on improving the transparency of pre-packs, which was launched in March, the organisation said pre-packs only look at the company that is pre-packing and ignore the wider effects.

BPIF director of corporate affairs Andy Brown said: "Insolvency practitioners are always looking at jobs. But it is important not to lose sight of the impact on competitors. Perhaps if a company that is struggling were to disappear, it would be beneficial to others.

"That won't be articulated by the insolvency industry and we didn't feel that it was covered strongly in the consultation, so we felt we needed to get it across."

The response was put together by the BPIF's government and industry committee, but has been based on consultation with members via letter, email and phone call, as well as committee meeting responses and comments on the dedicated printweek.com forum.

In its response, the BPIF argues that the current framework undermines the efforts made by legitimate business to meet their debt obligations.

It recommends that the requirements set out in SIP 16 should be translated into law, with statutory penalties for non-compliance.

It also backs a number of proposed remedies put forward in the consultation, including a new provision requiring that any person advising on a pre-pack should be precluded from becoming the administrator for the company, automatic scrutiny of the directors’ and administrators’ actions by an independent body and a redefinition of the remit of insolvency practitioners involved in pre-pack administrations.

Brown added that the BPIF would be voting to change its policy for the admittance of pre-packed companies at its next AGM.