The Government has dropped plans to bring forward a Bill on Audit and Corporate Governance Reform.
This is both an important and extremely welcome step in a long, drawn out process which began following the collapse of Carillion in 2018. Since then, FBUK has long argued against proposals that would have placed an enormous burden on large private and family businesses.
After years of anticipation and debate, ministers have concluded that the proposed expansion of the Public Interest Equity (PIE) regime – a far more onerous reporting and compliance framework – would have imposed substantial financial and administrative burdens on business without commensurate benefits.
Why this matters to family businesses
For many large UK family firms – for generations the backbone of regional economies and employment – the threat of being classified as part of the PIE regime carried serious implications – triggering heightened reporting requirements and regulatory oversight which, in practice, favours scale over substance.
This change of direction means leaders can instead focus on meaningful disclosures that genuinely serve investors, employees and customers, rather than box-ticking exercises.
Fiona Graham, Chief Advocacy Officer at Family Business UK, said:
This move recognises that good corporate reporting should be about clarity and usefulness, not complexity and volume. When stakeholders are overwhelmed with data that obscures rather than informs decision-making, transparency is undermined.
For years, we have worked with policymakers to ensure audit reforms strike the right balance between accountability and proportionality. This move shows that the clear, evidence-based arguments we have consistently presented have laid the ground for this U-turn.
We welcome the government’s renewed focus on proportionate reporting that supports growth and without the cost and complexity that risked holding businesses back.
A better regulatory focus
In making its announcement, the Government has signalled a clear pivot towards simplifying corporate reporting and reducing red tape, rather than pressing ahead with overly burdensome legislation. The Department for Business and Trade says the move will support growth and cut unnecessary costs for large enterprises – a message fully aligned with business concerns across the UK.
At a time when companies face rising economic challenges, the threat of additional compliance costs tied to unnecessary reporting and compliance would have acted as a disincentive to growth, particularly for businesses approaching the proposed threshold. Pulling back on this aspect of the Bill ensures that UK companies remain competitive both domestically and internationally.
