Press release: CMA launches immediate review of audit sector

As part of its review, the Competition and Markets Authority (CMA) will investigate whether the sector is competitive and resilient enough to maintain high quality standards.

The move comes amid growing concerns about statutory audits, in particular following the collapse of construction firm Carillion and the criticism of those charged with reviewing the organisation’s books, as well as recent poor results from reviews of audit quality.

CMA Chairman Andrew Tyrie said:

If the many critics of the audit process are right, it is not just the companies which buy audits that lose out; it is the millions of people dependent on savings, pension funds and other investments in those companies whose audits may be defective.

Sir John Kingman’s independent review of the regulator is a big step in the right direction. And the CMA will now examine the market carefully to establish what contribution more effective competition could make to improving audit quality.

CMA Chief Executive Andrea Coscelli also commented:

High quality audit work underpins a successful economy and benefits us all. Given the in-depth thinking already done by the CMA and the Competition Commission before it, we plan to move swiftly and to issue our provisional findings before Christmas.

The CMA’s market study will examine 3 main areas:

  • Choice and switching. Changes put in place by the Competition Commission appear to have strengthened competition between the big four firms – Deloitte, KPMG, E&Y and PwC – but the largest UK companies still turn almost exclusively to one of them when selecting an auditor to review their books.
  • Resilience. The market study will examine what the role of the big four firms means for resilience – the risk being that each of the big four auditors is “too big to fail”, potentially threatening long-term competition.
  • Incentives. Companies, rather than their investors, pick their own auditor. The CMA’s work will examine concerns that this might result in a lack of incentive to produce challenging performance reviews.

If the CMA finds evidence that the market is not working well after examining these areas, it will scrutinise all proposals for tackling them.

The CMA has written to the government about its market study and the possible need for legislation to implement its findings and those of the independent review of the Financial Reporting Council led by Sir John Kingman.

Find out more on the audit market study page.

Notes for editors

  1. Market studies are carried out using powers under section 5 of the Enterprise Act 2002 (EA02) which allows the CMA to obtain information and conduct research. They allow a wide consideration of issues affecting the market. They can include a range of outcomes including recommendations to government, enforcement action and referral for market investigation.
  2. The CMA intends to consult on provisional views by the end of the year and complete its work as soon as possible thereafter. As part of this, the CMA will take into account the views of a range of stakeholders, including the Financial Reporting Council as the sector regulator.
  3. The CMA is the UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law. For CMA updates, follow us on Twitter, LinkedIn and Facebook.
  4. Media queries should be directed to: press@cma.gov.uk or 020 3738 6460.



Press release: Report 16/2018: Detrainment onto live track near Peckham Rye

If you use assistive technology (such as a screen reader) and need a version of this document in a more accessible format, please email enquiries@raib.gov.uk. Please tell us what format you need. It will help us if you say what assistive technology you use.

Summary

At 18:46 hrs on Tuesday 7 November 2017, a London Overground service from Dalston Junction to Battersea Park, operated by Arriva Rail London, came to a stand shortly before reaching Peckham Rye station. A faulty component on the train had caused the brakes to apply, and the driver was unable to release them. There were about 450 passengers on the train.

The train driver spoke over the railway radio system to the service controller, train technicians, and the signaller. Following these conversations he began, with the assistance of a member of staff from Peckham Rye station, to evacuate the passengers from the train via the door at the right-hand side of the driver’s cab at the front of the train. This involved passengers climbing down vertical steps to ground level, very close to the live electric conductor rail (third rail) and walking along the side of the line for about 30 metres to Peckham Rye station.

Soon afterwards, an operations manager from Govia Thameslink Rail, which manages Peckham Rye station, contacted the member of station staff and realised where they were and what was happening. The operations manager immediately instructed the driver to stop the evacuation, and requested that he contact the signaller and his company’s controller for further instructions. The driver, after further advice from control room based train technicians, isolated various train safety systems, and found that he was eventually able to release the brakes and move the train forward into Peckham Rye station, arriving at about 19:44 hrs. It was then possible for all the remaining passengers to leave the train normally, and it proceeded, empty, to the depot at New Cross Gate. No-one was hurt in the incident.

The incident occurred because the driver initiated the detrainment of passengers without the traction current being switched off. He did this because he was given instructions by control room staff who had misunderstood the actual location of the stranded train. The train driver and the signaller did not reach a clear understanding about the actions that were required to safely detrain the passengers. The delay caused unrest among the passengers on the train and contributed to stress and task overload of the driver, which affected his decision making. The driver’s experience and skills did not enable him to cope with these demands, and Network Rail did not effectively implement its own procedures for managing an incident involving a stranded train.

Underlying factors were that Arriva Rail London strategic command and Network Rail signalling staff were not adequately prepared to manage the incident, and the railway industry standards and procedures relating to stranded trains place little emphasis on the need for practical training for those involved. The RAIB also observed that there were a number of deficiencies in the training and briefing of staff and in the ARL control room arrangements.

Recommendations

The RAIB has made three recommendations, directed to Arriva Rail London and Network Rail, intended to improve the response of the railway industry to train failures and other abnormal events, and has identified three learning points relating to the importance of following the correct procedures when preparing to evacuate passengers from trains, ensuring that communications are properly understood, and passing on the details of incidents promptly and effectively.

Simon French, Chief Inspector of Rail Accidents said:

“Minor technical faults on trains are a daily reality on the railways, but sometimes these minor events, if not identified and dealt with promptly, can quickly develop into a potential safety incident. On this occasion misunderstandings and confusion resulted in passengers being told to leave the safety of a train, climb down vertical steps above a live electric rail, and walk in darkness along an overgrown path to a station. About eighty people went through this before the evacuation was stopped, and it is very fortunate that no-one was hurt.

“When dealing with this type of incident, a train driver has many tasks to perform, and as we all know stress can sometimes affect our ability to function properly. Unfortunately, over recent years there have been a number of incidents on the railway in which train drivers have not been adequately supported when managing a difficult situation in unfamiliar circumstances. It is essential that on these occasions the signaller, train driver, any other involved staff (whether on the train or on the ground) and the various control rooms all work together to coordinate their activities to ensure the needs of passengers are recognised, and the train driver is supported to ensure that the incident is effectively and efficiently resolved.

“Following previous incidents, the railway industry has put in place policies for managing incidents in which trains become stranded. This incident has shown that when things go wrong, these policies may not be effective. One reason for this is that the people who have to put the necessary arrangements into operation do not get the opportunity to practise the procedures. We are recommending that, both locally and nationally, the incident management arrangements should be reviewed, and processes put in place to exercise them regularly. It’s not enough to have a plan – it must work when it is needed, and if it has never been practised the chances are it won’t work.”

Notes to editors

  1. The sole purpose of RAIB investigations is to prevent future accidents and incidents and improve railway safety. RAIB does not establish blame, liability or carry out prosecutions.
  2. RAIB operates, as far as possible, in an open and transparent manner. While our investigations are completely independent of the railway industry, we do maintain close liaison with railway companies and if we discover matters that may affect the safety of the railway, we make sure that information about them is circulated to the right people as soon as possible, and certainly long before publication of our final report.
  3. For media enquiries, please call 01932 440015.

Newsdate: 9 October 2018




Press release: Grading under review for Westmoreland Supported Housing Limited

The Regulator of Social Housing reports that Westmoreland Supported Housing Limited has been placed on its Grading under Review list.

It notifies that at the time of the last Statistical Data Return the provider had fewer than 1,000 homes and therefore does not have a current published regulatory judgement in accordance with our established procedures.

The regulator is currently investigating a matter regarding the providers’ compliance with the Governance and Financial Viability Standard. The outcome of the investigation will be confirmed in a regulatory notice, once completed.

The regulator’s GUR list is available on the website.

  1. The Regulatory standards can be found on the RSH website.

  2. The Regulator of Social Housing promotes a viable, efficient and well-governed social housing sector able to deliver homes that meet a range of needs. It does this by undertaking robust economic regulation focusing on governance, financial viability and value for money that maintains lender confidence and protects the taxpayer. It also sets consumer standards and may take action if these standards are breached and there is a significant risk of serious detriment to tenants or potential tenants. For more information visit the RSH website.

  3. See our Media enquiries page for press office contact details. For general queries, please email enquiries@rsh.gov.uk or call 0300 124 5225.




Notice: Christ Church regatta 2018: river restriction notice

River Thames restriction information for Iffley reach on 21 to 23 November and 24 November 2018.




National Statistics: Road fuel prices: 8 October 2018

Cost of unleaded petrol (ULSP) and unleaded diesel (ULSD) in the UK as at Monday 8 October 2018.