The new audit regulator’s boss should be based in London, not Birmingham
Will the arrival of just shy of 200 regulatory staff in Birmingham, relocated from London, make a tremendous difference to the West Midlands economy? Probably not. Will putting half the staff of the new audit regulator in Birmingham risk making the body less effective? That ones easier: yes.
The plan for the CEO of the new regulator to hole up in Birmingham, a rumour confirmed by City PM at the back end of the last week, is hugely short-sighted. It is of course not the Financial Reporting Council’s fault – the soon-to-be-replaced regulator is a victim of central government policy which demands more chairs are filled outside the capital.
But to put it bluntly: it makes precious little sense for the boss of the auditing regulator to be in a different city to the bosses of the auditors, almost all of whom are (unsurprisingly) based in London.
Bearing in mind the regulator will be obliged to put people on site within the organisations they regulate, and the whole thing has the makings of a logistical nightmare and a bucketload of taxpayer-funded train trips. Perhaps it’s one way to justify HS2, though with the body set to come into life in the coming years there will be plenty of senior staff on the complaints line to Avanti West Coast for a while yet.
We are being of course slightly facetious – there are no doubt a number of clerical roles that could happily be based in the west Midlands, or even further afield.
But symbolism matters, especially for a new regulator in an industry in desperate need of better oversight, so it is vital that at the very least the supervision and legal side of the business remains in the capital.
London’s professional services are a powerful driver of the UK’s economy, and in order for them to remain so it is vital that they have a regulator with authority and substance, and presence in all senses of the word.
The plans for a two-office structure and a half-here, half-there CEO are difficult to square with that goal.