The Office of Fair Trading (OFT) is one of dozens of quangos that are to be amalgamated into related Whitehall departments. But it is one that has important implications for UK companies.
There are no plans to dilute the OFT's enforcement functions when it is absorbed into the Competition Commission, but budgetary constraints deem it unlikely that it will be able to afford the same kind of consumer advocacy it has provided in the past.
The newly amalgamated OFT will still be able to pursue allegations against corporate entities that may have breached competition guidelines, as in the recent case concerning Reckitt Benckiser. Though the OFT had faced industry criticism over a lack of transparency and undue delay when investigating alleged anti-competitive practices., these types of out-of-court settlements provide an efficient means of dealing with disputes, which in a more litigious environment, could get caught up in red tape for years.
Perhaps the most controversial target to be disbanded entirely is the Audit Commission. It was identified by Communities and Local Government Secretary Eric Pickles as typical of the type of nominally semi-autonomous body that had effectively become part of the Whitehall apparatus because of the previous government’s fixation with setting targets.
The responsibility for the audit processes for around 11,000 local government bodies will be decentralised, and placed in the hands of local officials, but under the auspice of the National Audit Office. Local bodies will be able to appoint their own independent external auditors from the open market, which theoretically should provide a catalyst for greater competition in the audit market - although some think its functions will simply be secured by the Big Four accountancy firms, thereby perpetuating an existing imbalance in the market.
