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.
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.
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 range of stakeholders, including the Financial Reporting Council as the sector regulator.
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.
Media queries should be directed to: press@cma.gov.uk or 020 3738 6460.
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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
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.
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.
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.
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.
the decision follows a successful trial by HM Prison and Probation Service (HMPPS) at 4 prisons
PAVA can help to de-escalate potentially violent situations, keeping staff and prisoners safe from serious harm
part of wider drive to protect officers and improve safety and security in prisons
Prison officers across the country will be equipped with incapacitant spray to help keep them safe and maintain order, Prisons Minister Rory Stewart announced today (9 October 2018).
Following a successful pilot conducted by HMPPS, who have made the decision to roll out nationally, a £2 million investment will ensure every prison officer in the adult male estate is equipped with PAVA – a synthetic pepper spray which temporarily incapacitates those it is sprayed upon.
PAVA can help to prevent serious harm to staff and prisoners alike, as well as being a tool to persuade prisoners in the act of violence to stop. It will be a crucial step to help reduce serious harm in prisons.
It will only be deployed in limited circumstances when there is serious violence or an imminent risk of it taking place, and where its deployment will reduce the risk of serious injury. All prison officers will receive specialist training before being allowed to carry the spray. It will be delivered in prisons where ‘keyworker’ training has already been rolled out. This will allow officers to build more positive relationships with prisoners, support their rehabilitation and manage difficult behaviour – before the need for any force is required.
This is the latest of a number of measures taken by government to protect prison officers, which include doubling the maximum sentence for those who assault them as well as rolling out body worn cameras, ‘police-style’ handcuffs and restraints. Meanwhile more than 3,500 additional officers have been recruited since October 2016.
It comes amid a wider drive to bring stability to prisons, with a £40 million investment announced over the summer to improve the prison estate and tackle the problems that drive much of the violence, including drugs and mobile phones.
This funding will allow the introduction of more airport-style body scanners, phone-blocking technology and drug-detecting dogs, and there will be a particular focus on the country’s 10 most challenging prisons.
The PAVA roll-out will start early next year, giving time for essential training to take place first.
Prisons Minister Rory Stewart said:
Prison officers’ ability to keep control of prisons, and the chaotic individuals within them, is vital to ensuring everyone’s safety.
Violent individuals are as much of a danger to other prisoners as they are to prison officers. Most prisoners want to keep out of trouble and see the prison authorities given the means to keep control, so that they can focus on rehabilitation.
Safer prisons means dealing effectively with a dangerous minority, while allowing more offenders into education and work and reducing the likelihood of them reoffending.
The PAVA pilot took place at HMP Hull, Preston, Risley and Wealstun over a 6 month period, and it will now be rolled out across the adult male estate.
Notes to editors
This was decision taken by HMPPS as part of their safety programme.
Prison officer numbers are at their highest level since 2013. The majority of the new recruits are already on the landings, joining our dedicated officers who play a vital role in making sure prisons are safe, secure and decent.
The Assaults on Emergency Workers Bill received Royal Assent which will increase the maximum sentence for assaults against prison officers to double from 6 to 12 months in prison.
In July we announced a £30 million investment including £16 million to improve conditions for prisoners and staff and £7 million on new security measures, including airport-security style scanners, improved searching techniques and phone-blocking technology. This also includes £1 million on a digital tool which assesses information from various law enforcement databases to create a central ‘risk rating’ for each prisoner.
In August we announced another £10 million would be invested in 10 difficult prisons to curb the flow of drugs and phones, while also improving conditions as those jails and improving leadership. This will tackle drug supply by enhancing physical security at the jails; with investment in drug-detection dogs, body scanners, and improved perimeter defences.
The images will be released at Birmingham Library at the first of a series of public engagement events during October, which give people the opportunity to see the new designs and give feedback.
Curzon Street station in central Birmingham will be the first brand new intercity station built in Britain since the 19th century, and create a new landmark for the city and boost opportunities for regeneration in the city. Opening with 7 high speed platforms in 2026, the new station will not only be for high speed rail passengers, it will be a brand new public space in Birmingham city centre. It will be fully integrated into an extended tram network, as well as offering pedestrian, cycle, taxi, bus and conventional rail connections to the rest of the city and the wider West Midlands.
Interchange station will be a new major gateway station for the region, part of a new public transport interchange serving Solihull, the West Midlands, Birmingham Airport and the NEC. The station will help deliver longer term development and growth proposals for the area around the station, including new homes, business space and jobs.
Designs for the new HS2 Interchange station will also be released today.
HS2 is also considering a number of extra elements to the scheme put forward by the Urban Growth Company (UGC) which aim to maximise the opportunities the new HS2 Interchange Station presents as a key catalyst for growth.
WSP UK Ltd, working with Grimshaw Architects LLP is designing Curzon Street and Arup is designing Interchange station.
Chris Grayling MP, Secretary of State for Transport, and Andy Street, Mayor of the West Midlands, marked the start of works on the site of the future Curzon Street station last week. Works are well underway on 60 sites across the route from London to Birmingham, with over 7,000 jobs supported by the programme across the country on our way to 30,000 jobs at peak construction.
Andy Street, Mayor of the West Midlands, said:
These brand new stations will be catalysts for regeneration, creating jobs and opportunities for local people and economic benefits for Birmingham and the Midlands. Curzon Street station will put Birmingham at the heart of Britain’s new high speed network and enhance the rail connectivity for the city, whilst Interchange provides a once in a life time opportunity to help drive the growth of the region.
HS2 Ltd CEO, Mark Thurston, said:
Both of these new stations will be transformational for the Midlands and will create opportunities for regeneration, growth and economic benefits for the city and region. Preparatory work for the stations is well under way, with a variety of enabling works including the construction of access roads and archaeological investigations.
As part of our plans to deliver a ‘green corridor’ across the whole route, we’re also creating new ecological habitats, community and amenity spaces to help integrate the new line and our stations into the surrounding landscape and environment. All of this activity is already creating job opportunities not just in the region, but across the whole country.
Sir John Peace, Midlands Engine Chairman, said:
HS2 is already a huge part of the Midlands’ success story, bringing jobs and investment with it. These pioneering new station buildings will showcase a rail revolution which has our transformed region at its core.
HS2 will be one of the most celebrated infrastructure projects in the world when trains start rolling in to Interchange and Curzon Street in 2026, with a regenerative ripple effect that will be felt across the Midlands. I can’t wait to see the stations take shape.
Both stations have been designed with features to make it easy and simple for passengers to navigate the stations, access the platforms and connect seamlessly to other forms of transport.
HS2 Minister, Nusrat Ghani, said:
Birmingham will be at the heart of HS2, and the transformation that is already taking place shows exactly how our new high-speed railway will drive forward regeneration and economic growth across the country.
Unveiling the station designs for Curzon Street and the Solihull Interchange is a milestone moment. These stations will be catalysts for local jobs and new homes, as well as giving passengers access to thousands more seats, more services and better journeys.
We also want HS2 to set a new benchmark for truly inclusive travel, creating a railway that works for everyone. The task for our designers and engineers is now to take these ideas from the drawing board to reality, building iconic stations that are accessible, safe and open to all, no matter their needs.
Carol Stitchman, WSP Design Manager on Curzon Street, said:
As well as being a catalyst for regeneration, the new HS2 Curzon Street station will become a landmark destination, welcoming people to the heart of Birmingham. Our design recognises the station’s function as a place of arrival and connection. It is the only HS2 station that welcomes you with a view of the city, where you can see the city from the train, and the train from the city.
WSP has welcomed 16 new apprentices to the Curzon Street station project, as part of our 140-strong project team. We are committed to boosting the skills of Britain’s next generation while delivering this transformative project.
Neven Sidor, Lead Architect, Grimshaws, for Curzon Street station, said:
HS2’s new Curzon Street station is inspired by the best station design of the past, inspired by Britain’s pioneering railway and industrial heritage reimagined for the 21st century. The elegant sleek low arch which will make the station instantly recognisable in the surrounding area and its warm coffered soffit will join the growing list of modern Birmingham icons. The West concourse will have the ambiance of a modern airport terminal with both platform and waiting areas included in the grand arched space. The East concourse has been designed to include the historic Curzon Station building as part of a revitalised New Canal Street scene.
Kim Quazi, Lead Architect, Arup, for Interchange station said:
Interchange station sits within a unique setting, on the edge of the urban landscape in a currently rural location. The station building has been designed to reflect its surroundings and in context with the natural landscape and topography.
The station roof has been designed to fit in with the surrounding landscape, and to optimise natural daylight using an integrated, efficient structural form and rainwater management system. We have also focused on a number of objectives including creating a positive experience for future users and rail passengers by including open space, parkland and views to green spaces, and constructing a green building with low energy consumption and low maintenance.
The series of engagement events for both stations will run through October. These will give people the opportunity to understand HS2’s design vision for the stations, share thoughts on the accessibility and use of the stations, and get more information on the next stages in the design process and planning submissions. More information on the events and locations can be found on HS2’ Commonplace websites: HS2 in Solihull and HS2 in Birmingham.
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Valdek Hetman (61), from Ilkeston, Nottinghamshire, received the maximum ban possible and was joined at Derby Crown Court on Monday 1 October by his accomplice Brendon Doherty, who received a 5-year directorship disqualification for assisting him to carry out his offences.
At an earlier hearing on 28 September at Derby Crown Court, Valdek Hetman also received a 6 months’ prison sentence, suspended for two years, and was ordered to complete 120 hours of unpaid work and pay £750 costs. Brendon Doherty was ordered to pay a £600 fine.
The court heard that Valdek Hetman was made bankrupt for 12 months in July 2014, having been petitioned by a supplies company for unpaid bills.
And two years later, he accepted a disqualification undertaking that prevented Valdek Hetman from running companies for 10 years in July 2016 for his role in the liquidation of Abbey Constructions Midlands Limited.
However, despite agreeing to be disqualified and having a range of restrictions placed upon him, Valdek Hetman continued to run companies in direct contravention of the disqualification undertaking he had personally signed.
Following complaints to the Insolvency Service, investigators found proof that Valdek Hetman had been running two companies: Abbey Construction Group (East Midlands) Limited and Abbey Construction East Midlands Limited.
Furthermore, Abbey Construction (East Midlands) Limited had been made subject to compulsory liquidation in March 2015 and the name was banned from being used again. However, Hetman and Doherty committed a further offence when they traded using the name Abbey Construction East Midlands Limited, which was deemed similar to the banned name and allowed them to benefit from the association.
When interviewed by the Insolvency Service, the construction boss said he did not accept the facts given in the disqualification he had personally accepted in 2016.
Valdek Hetman also claimed that he worked as a contracts manager and Brendon Doherty (36) from Nottingham was the real boss and the listed director of Abbey Construction Group (East Midlands) Limited and Abbey Construction East Midlands Limited.
Arwel Jones, Director of Criminal Enforcement for the Insolvency Service, said:
We were able to demonstrate in spite of Valdek Hetman’s assertions, he was clearly running those companies, while his accomplice Brendon Doherty knew exactly was going when he played Hetman’s front-man.
Our actions should serve as a warning that running a company while serving a ban is a serious offence that will land you in further trouble.
On 4 September 2018 both defendants appeared at Derby Crown Court. Valdek Hetman pleaded guilty to two counts of managing a company while disqualified and one count of managing a business known by a prohibited name.
Brendon Doherty was pleaded guilty to one count of assisting Valdek Hetman to act in the management of companies.
Notes to editor
A disqualification order has the effect that without specific permission of a court, a person with a disqualification cannot:
act as a director of a company
take part, directly or indirectly, in the promotion, formation or management of a company or limited liability partnership
The Insolvency Service administers the insolvency regime, investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. It may also use powers under the Companies Act 1985 to conduct confidential fact-finding investigations into the activities of live limited companies in the UK. In addition, the agency deals with disqualification of directors in corporate failures, assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees, provides banking and investment services for bankruptcy and liquidation estate funds and advises ministers and other government departments on insolvency law and practice.
Further information about the work of the Insolvency Service, and how to complain about financial misconduct, is available.
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