Company Law Reform Bill [HL]

I thank both noble Lords for their insights into their roles on audit committees. As has been acknowledged, this amendment would have the effect of bringing the Professional Oversight Board for Accountancy within the provisions of the Freedom of Information Act. The POBA is an operating body of the Financial Reporting Council and is currently responsible for exercising the Secretary of State’s functions in relation to auditors delegated to it under the 1989 Act. In addition, the Government expect that the role of the Independent Supervisor of the C&AG will be carried out by the POBA. As an operating body of the FRC, which is a company set up entirely independent of government, the POBA is not currently subject to the obligations of the Freedom of Information Act, and I acknowledge some of the ramifications that flow from that. Section 5 of the Act allows the Secretary of State to designate a body for the purposes of the Act if it appears to him to exercise functions of a public nature or if it provides services to a public authority the provision of which is a function of that public authority. Any designation would be limited to the relevant public functions discharged or services provided by the body. However, I do not believe that this Bill should itself determine the POBA’s status under the Freedom of Information Act. The board is accountable to the Secretary of State and through him to Parliament for the exercise of all the functions that may be delegated to it under the powers in this part of the Bill and corresponding powers in existing legislation. The requirements in the 1989 Act for the body to report annually to the Secretary of State and for that report to be laid before Parliament are restated in Schedule 13 to this Bill. The activities of the board go beyond the scope of this part of the Bill and any delegation order under it. For example, its work also involves the oversight of how professional bodies regulate their members outside of the audit engagement—a particular point that has been raised in our debate. It also carries out the monitoring of audit quality within the UK, an area on which it publicly reports its findings. The inclusion of the POBA within the provisions of the Freedom of Information Act is an issue that requires careful consideration and consultation. The Government are currently building up evidence of how freedom of information has impacted on the bodies that meet the existing criteria. We feel it is important to gain such evidence to inform consideration of how Section 5 might be used. We believe that this is the appropriate context within which to consider the position of the board with respect to inclusion within the provisions of the Act. This is an important issue to which we will give careful consideration, but I would emphasise that any consideration of Section 5 designation is and should remain completely separate to the passage of this Bill. If that is not the complete answer sought by the noble Baroness, in the terms of the noble Lord, Lord Hodgson, there is half a loaf here.