The government’s decision to pick Birmingham as the future home for the UK’s new audit watchdog could see an exodus of talent from the regulator it is set to replace, industry experts have warned.
City A.M. reported yesterday that ministers had picked the UK’s second largest city, Birmingham, as the home of the soon-to-be-launched Audit, Reporting and Governance Authority (ARGA).
However, industry experts have warned the move out of London could plunge the regulator into a recruitment crisis, as staff leave the UK’s current Financial Reporting Council (FRC) audit watchdog to get jobs in the private sector instead.
Paul Brehony, the former head of PwC’s commercial litigation group, said “concerns remain that a move from the City of London might lead to a talent exodus.”
Atul Shah, professor of accounting and finance at City University, said the Big Four accounting firms will likely view ARGA’s move as a recruitment opportunity, as they seek to poach the FRC’s former staff.
Marcus Panton, director of the Audit & Risk Recruitment Company, raised concerns that a large proportion of the FRC’s 400 strong workforce may be highly reluctant to move to Birmingham.
He said that many FRC staff may opt to stay in London and commute to Birmingham two days a week, therefore defeating the purpose of creating jobs outside the capital.
Under current rules, FRC staff are only required to work two days per week in the office.
Panton said ARGA could also struggle to recruit new staff outside of London as the ongoing ‘battle for talent’ continues to see demand for accountants outstrip supply.
The comments come as the sector goes on a hiring spree, with Big Four firm Deloitte recently announcing that it was looking to hire 6,000 audit and assurance staff over the next five years.
Gemma Gathercole, strategic engagement lead at the Association of Chartered Certified Accountants (ACCA) said ARGA may face issues in recruiting staff with “specialist technical skills” that are “traditionally associated with the City of London.”
The FRC did not directly comment on the risk of staff leaving the agency.