The government’s retreat from Carillion audit reforms is feeble | Nils Pratley
The wait for the “long-awaited” government bill to reform the audit market is over.It is not because ministers have decided it’s embarrassing that eight years have passed since the collapse of Carillion, the massive corporate failure that reminded everybody that auditing is boring until it matters greatly that outsiders can trust the published numbers.Rather, it is because the government has given up on a reform bill.It would rather give another airing of its “pro-growth” refrain.“While the planned reforms would be beneficial, some would increase costs on business, and it would not be right to prioritise these over more deregulatory measures,” the minister for small business, Blair McDougall, formally told the business select committee.
He had other explanations – not enough parliamentary time and “the need for major reform is less pressing than it was” – but all can be regarded as a case of short memory syndrome.Back in 2018, the chaotic collapse of Carillion, one of the country’s biggest construction and contracting firms, prompted near-universal agreement that the quality of audit in the UK, and audit regulation, was overdue for a major upgrade.Almost 3,000 employees lost their jobs and, since the company was up to its neck in contracts to service schools and hospitals, the government had to spend £150m to maintain basic services.The shocking detail was that it took just six months from Carillion’s first profits warning to full calamity.At the end, liabilities were about £7bn and cash just £29m.
KMPG, as auditor, copped a record fine from the audit watchdog, the Financial Reporting Council (FRC), and the fallout continues, with two ex-Carillion directors being fined by the Financial Conduct Authority as recently as this month.But, back in 2018 the whole saga was viewed as so serious that a new regulator was needed, armed with stiffer powers and a broader remit, as recommended by the City grandee Sir John Kingman in a review for government.A white paper was issued in 2021 but a bill never made it on to the legislative agenda of the Brexit-consumed last Tory government.Now it won’t appear under Labour either.The best that can be said in the government’s defence is that it is correct that the FRC, after a clear-out of old management, upped its game in subsequent years.
The club looks less cosy now that the big four have separated their audit and advisory arms.But the biggest flaw was always the FRC’s lack of statutory status to guarantee its annual funding and its powers to summon witnesses.If the FRC is being retained, rather than replaced, will it at least be put on statutory footing as a matter of absolute urgency? “As soon as parliamentary time allows,” is the government’s weak promise.But there seems to be no intention even to try to resuscitate other elements that were previously viewed as vital.One was the proposal to bring the largest private companies into a tighter regulatory auditing system (the BHS failure happened at roughly the same time as Carillion’s).
A second was the plan to give the regulator powers to hold to account directors who are not members of accounting bodies.If the government regards those proposals as inessential pieces of regulatory flummery, it should rethink.Private companies are getting bigger all the time and the FRC, not just the FCA, should be able to go after all directors in cases like Carillion.A generation ago, in 2001, the US had its “Enron moment”, the bankruptcy of a major energy company amid an accounting scandal.Within a year, it had passed the Sarbanes-Oxley Act, which rearmed regulators and created criminal penalties for corporate misreporting.
In the UK, the “Carillion moment” of 2018 has been met with eight years of ineffectual fiddling by successive governments that will result, maybe, in the bare-minimum requirement of statutory powers for the regulator being tacked on to some other financial bill.This does not feel like dynamism in action.
The inside track on curbing UK prison violence | Letters
Alex South’s harrowing account of violence in prisons (Death on the inside: as a prison officer, I saw how the system perpetuates violence, 13 January) deserves more than our sympathy – it demands we recognise these murders and assaults not as symptoms of a broken system, but as a foghorn blaring warnings about fundamental failures.I work in prisoner rehabilitation. I see what South describes from the other side: men whose “scaffolding” is indeed flimsy, who have accumulated trauma before and during incarceration. But I also see what happens when that changes. Our service users work in cafes, bakeries and bike shops, not because we believe in the redemptive power of bread or bicycles, but because meaningful work and purposeful activity are the foundations of desistance
She’s just autistic Barbie – let children play | Letters
As the parent/carer of autistic children, I’m pleased that my kids have more visibility in mainstream culture with the launch of the “autistic Barbie” doll (Mattel launches its first autistic Barbie, 12 January). For the kids, they’re interested, but, given my youngest’s penchant for graffiti, “autistic Barbie” will be drawn all over and resemble “weird Barbie” in no time.I’ve found it hard to share this pleasure, having seen my academic and activist colleagues slam the doll. I completely understand their reasoning. Of course it lacks nuance to use visible accessories to represent a hidden disability
Private investigators must be trained to spot signs of domestic abuse and stalking | Letter
I was grateful to read the Guardian investigation revealing how perpetrators of abuse are using private investigators to further harm by proxy, exposing the unseen threat faced by victims and their supporters (You feel violated’: how stalkers outsource abuse to private investigators, 11 January).As the manager of a sexual and domestic abuse service, I see the impact of stalking on a monthly basis, not as an adjacent concern but as one of the clearest predictors of intimate partner homicide we have. Victim-survivors who disclose stalking and associated behaviours are rarely paranoid; they are often correctly identifying imminent danger.Extraordinary measures are taken by victim-survivors to stay safe: changing names, abandoning jobs or study, moving across the country, and fleeing into refuges or new areas to live anonymously. Yet even these steps can prove redundant if an unregulated investigator is paid to track them
Positive thinking could boost immune response to vaccines, say scientists
Positive thoughts may boost the immune system according to research that points to a connection between the mind and our body’s natural defences.Scientists have found people who used positive thinking to boost activity in the brain’s reward system responded better to vaccination, with their immune systems producing more antibodies than others after having the shot.The work does not mean being hopeful can rid people of disease, but hints at the potential for mental strategies to help the immune system fight infections and even attack tumours to keep them at bay.“It’s the first demonstration in humans, in what seems to be a causal manner, that if you learn how to recruit your reward system in the brain, the effectiveness of immunisation increases,” said Talma Hendler, a professor of psychiatry and neuroscience at Tel Aviv University.Previous work has shown that positive expectations can benefit patients with some medical problems, as seen in the placebo effect
Pepper spray use at young offender institutions in England ruled legal
An attempt to halt the use of pepper spray on children held in young offender institutions (YOIs) has failed after the high court ruled on Monday that the weapon’s rollout was lawful.The Howard League for Penal Reform challenged the Labour government’s decision to authorise the use of Pava, a synthetic form of pepper spray, in three prisons in England holding boys as young as 15.Risks such as the physical and psychological harm posed by Pava, the likely disproportionate use of the spray against disabled children and black and minority ethnic prisoners, and propensity to increase violence overall, had not been considered, the charity said.But in a judgment on Monday, Mr Justice Calver said that the then justice secretary, Shabana Mahmood, had sought to ensure that its use was only as a “last resort”.“It is plain that the secretary of state was closely involved in the formation of the Pava policy and was insistent upon thorough safeguards being introduced concerning its use, as well as constant ‘live’ monitoring and oversight of the limited use of Pava which she expected to be extremely rare in view of the limitations upon its use: viz, as a last resort, and only where there is an immediate threat of life-changing or life-ending violence,” the judgment said
‘Jess’s rule’ posters remind GPs in England to re-examine patients’ symptoms
Millions of patients in England will this week be urged to ask their GP to think again if they have not had a diagnosis for their symptoms after three appointments.From Monday, GP practices across the country will use posters to promote Jess’s rule, a new system aimed at preventing serious illnesses from being missed and needless deaths. It is named after Jessica Brady, a 27-year-old who contacted her surgery 20 times before dying of cancer in 2020.Jess’s rule urges family doctors to consider a second opinion, conduct a face-to-face physical examination or order more tests if a patient has had three appointments for their symptoms but no diagnosis.Posters advertising Jess’s rule have been sent to all 6,170 GP practices in England
The government’s retreat from Carillion audit reforms is feeble | Nils Pratley
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