Campaigners have been dealt a blow after Britain’s accounting watchdog successfully fended off an attempt to force it to respond to freedom of information requests.
The Financial Reporting Council has secured a legal victory after months of pressure from campaigner Margot Gibbs who, since 2017, has sought more information from the regulator on its controversial handling of an investigation into the near-collapse of UK bank HBOS.
The FRC launched an investigation into KPMG’s audit work for HBOS in 2016, but only after it came under heavy pressure to do so from prominent MPs. Last year the FRC closed the investigation and cleared KPMG of misconduct.
Ms Gibbs aimed to challenge the FRC’s stance to the freedom of information act, which allows individuals to seek information from public bodies. The FRC has repeatedly rejected information requests on the grounds that only a limited amount of its work falls within the scope of the legislation.
In 2017 Ms Gibbs made a freedom of information request to the FRC, in which she requested copies of emails and notes between members of the regulator’s conduct committee that were relevant to its earlier decision in 2013 not to investigate KPMG’s audit work on HBOS.
The conduct committee at the time included former KPMG partners.
Ms Gibbs said her intent was to find out whether there “were any back channels between conflicted members [on the conduct committee] and the firm”, KPMG, when the decision was made not to investigate its audit work on HBOS.
Her freedom of information request was rejected by the FRC last year. She subsequently appealed against that decision at the regulator, which was also rejected.
Ms Gibbs then took the matter to the Information Commissioner’s Office, which is meant to uphold information rights.
The ICO rejected her case this year, prompting a final appeal to the information tribunal, a public body that scrutinises decisions by the ICO. The tribunal on Monday ruled in the FRC’s favour.
Ms Gibbs said she accepted the tribunal’s decision, although she hoped her appeal would prompt the government — which has launched a review of the FRC — to consider making the regulator fully accountable under the freedom of information act.
She said: “The FRC [has] managed to avoid scrutiny by the public — unlike the other major regulators. As an organisation that performs a public function and is stacked full of [former] members of the companies it regulates, it’s hugely important that the FRC can be scrutinised.”
In April the FRC was accused of a “shocking” lack of transparency after it emerged that it had avoided giving full responses to almost 90 per cent of the freedom of information requests it had received since 2013.
The regulator said: “We welcome the tribunal’s ruling which supports the FRC’s policy.”
Get alerts on Financial Reporting Council when a new story is published