The Government’s decision to no longer pursue the Audit and Corporate Governance Reform Bill is a disappointing setback for the small and mid-sized businesses that underpin the UK’s public markets.
While we support the objective of reducing unnecessary administrative burdens, withdrawing the Bill removes a critical opportunity to reform the deeply flawed Public Interest Entity (PIE) regime. As it stands, the current framework creates a regulatory paradox in which many small-cap quoted companies are subject to higher and more costly audit and reporting requirements than some of the UK’s largest private companies.
This imbalance has real-world consequences. Disproportionate compliance costs and reduced auditor choice are placing growing pressure on smaller quoted companies, undermining confidence in public markets at a time when the UK should be encouraging growth, investment and long-term capital formation.
We have raised these concerns directly with Blair McDougall MP, Minister for Small Business and Economic Transformation at the Department for Business and Trade, and will continue to press for a proportionate, coherent approach to audit and corporate governance reform that supports the sustainability and competitiveness of the UK’s public markets.
