By Huw Jones
LONDON (Reuters) - Britain's accounting watchdog said on Monday it would scrap a planned increase in staff because of continued delay in obtaining new powers to crack down on lax auditors after a string of high-profile company failures.
The collapse of retailer BHS, builder Carillion and cafe chain Patisserie Valerie triggered three government-backed reviews that recommended root-and-branch changes to improve audit quality, including a more powerful regulator to replace the Financial Reporting Council (FRC).
A draft law has yet to been proposed to parliament to implement the reforms.
"Given the delay to legislation that would have expanded its remit, the FRC has decided against the previously planned 16% headcount increase to 590 staff," the watchdog said on Monday.
Headcount would remain flat at around 506 in 2024-25 to avoid unnecessary cost increases for levy payers, the FRC said.
It set an overall budget of 71.5 million pounds ($90.2 million) for the financial year starting in April, up from 66.3 million pounds in the current year.
The hike covers setting up a second office in Birmingham, at the request of government, and moving its London head office to another location in the capital.
Parliament's business and trade committee holds a hearing on Tuesday into why promised audit reform has been delayed, and will put questions to small business minister Kevin Hollinrake, FRC CEO Richard Moriarty, senior auditors, and John Kingman, who chaired one of the three government-backed reviews.
"Despite warnings that reform was needed in 2020, legislation that would’ve enabled it was pulled in October 2023 while legislative plans to create a new and stronger regulator were omitted in the King’s speech," the committee said in a statement, referring to the speech that sets out government legislative plans for each parliamentary session.
($1 = 0.7925 pounds)