Companies House: who’s watching how it works the numbers?
This week the Guardian is looking at Companies House, and the peculiar justifications it uses to not tell us about how it determines data charges – and the worries that would-be competitors (to this organisation to which by law companies must report their accounts) have about its move into value-added services.
The article – Companies House holds all the cards – reveals gems like this:
The argument for allowing Companies House to charge for information is that this helps reduce the cost of the mandatory part of its business, company registration. But the way Companies House works out its costs and charges is far from transparent. The agency sent us a document, Principles of Cost Allocation, which admits that producing such figures “is not a trivial exercise because the information available is not readily available”.
The document does not list all the product areas – one is blanked out, on the grounds that it is exempt under section 38 of the Freedom of Information Act. This exempts disclosures on the grounds that it may endanger the physical or mental health or safety of an individual.
We’re wondering who the individual is..
The contents of a pricing review, published internally in June 2004, are even more mysterious. It comes with a sheet explaining that “some parts of the report have been redacted” as it is exempt from disclosure under the Freedom of Information Act. One reason given is that information “is of a sensitive nature and could prejudice the commercial interests of Companies House”.
Increasingly, what we’re finding in this campaign is that the question of the “commercial interests” of organisations that have statutory powers seems to override the commercial interests of just about anyone else who isn’t that organisation – including private companies and local government. This can’t be right.
- The following posts may be related...(the database guesses):
- If you get free data, what will you do with it? (19 April 2008; score: 30.31%)
- At last - free tide data, going back nearly 100 years (13 April 2006; score: 25.51%)
- Who's who after the reshuffle (12 July 2007; score: 24.94%)
- Will the Post Office and Ordnance Survey ever agree about house names? (10 July 2006; score: 23.65%)
- Tim Berners-Lee and Nigel Shadbolt on the benefits of open data (18 November 2009; score: 23.42%)
May 18th, 2006 at 10:36 am
To quote from the article “Companies House holds all the cards ” in the Guardian of 18th May 2006:
“But potential competitors are concerned about a new electronic service, Monitor, developed as part of a set of measures to prevent fraudsters hijacking companies. Subscribers receive an email notification when new documents are filed relating to a specific business. The cost: 50p a company. “There’s no way we could offer anything at that price,” an executive at a leading business information firm said.”
In fact it is possible to offer something at that price, well actually for less!
CoSec Pro is company secretarial software from accounting software house Digita. It is used by company secretaries and accountants for the maintenance of companies’ statutory records and for filing the necessary returns at Companies House. It is one of the top five software packages used for filing company annual returns electronically.
Given that the statutory records of tens of thousands of UK limited companies are administered using CoSec Pro we saw an opportunity to add value to our software by helping our users protect their, or their clients’ companies against company hijacking.
After researching how we could monitor the live Companies House database, earlier this year we launched a new feature within CoSec Pro called Sentinel. This feature directly monitors new filings at Companies House and, within the software itself, automatically alerts users whenever a new filing has been made that relates to one of their companies.
The direct cost to us of retrieving the data from Companies House is minimal, which allowed us to provide the Sentinel feature to our users as an integral part of CoSec Pro at no additional cost. Our main cost was in developing the software and back-end infrastructure to provide this service. By contrast, the cost of the data from Companies House was not an issue.
My point here is that the picture is not as black and white as is painted in the article. The Monitor service, charged by Companies House at cost, is surely in the public interest as a crime fighting initiative. By by launching Sentinel, Digita proves that Companies House have not prevented private initiative either.
Finally, it seems harsh to criticise Companies House for the Monitor service specifically, given the amount of press criticism that they were not doing enough to combat company identity theft in the first place (”A licence to steal from Companies MADHouse” – The Mail on Sunday) – heads they lose, tails they lose.
May 18th, 2006 at 8:44 pm
In fact it is possible to offer something at that price, well actually for less!
CoSec Pro is company secretarial software from accounting software house Digita. It is used by company secretaries and accountants for the maintenance of companies’ statutory records and for filing the necessary returns at Companies House. It is one of the top five software packages used for filing company annual returns electronically.
Given that the statutory records of tens of thousands of UK limited companies are administered using CoSec Pro we saw an opportunity to add value to our software by helping our users protect their, or their clients’ companies against company hijacking.
So Companies House provided the data for free to you?
Or did you – as I think we’re all expecting – have to pay for it, and you amortise that cost through the expectation of increased sales?
May 19th, 2006 at 10:39 am
Thanks for that information, Ian.
Your point about “heads they lose, tails they lose” is well made and could apply to a number of organisations caught by the contradictions inherent in the government’s trading fund policy. I hope the article conveyed my impression that the managers of Companies House are only doing their job -and, by the yardsticks that apply under current government policy, seem to be doing it very well.
Our campaign’s purpose is to question that government policy. Wtih Mr Arthur’s permission, I’ll have more to say on that subject in next Thursday’s paper.
Michael Cross
May 19th, 2006 at 11:18 am
Charles, yes we are in business and do hope that our investments will increase sales.
From the perspective of a supplier to company filers, rather than to information consumers, the crux of the matter is the need for Companies House to make a distinction between what it charges a company (the filer) to access to it’s own records, and what it charges to third parties (information consumers).
At present Companies House make no distinction: “(Monitor) enables you to keep an eye on your competitors, business collaborators and your own company and ‘monitor’ which documents have been filed into Companies House.”
In the case of the filer, it is they who filed the records in the first place, it is they that are under threat of legal sanctions if their public record is not up to date and it is they who pay for the maintenance of their records at Companies House through the annual filing fee. Given that Companies House can’t guarantee to prevent fraudulent filings it is also they who have to monitor their public record to protect there businesses and its stakeholders. It is in everybody’s interest that the public record is kept up to date, accurate and protected from fraudulent filings, so Companies House should keep the cost of access for filers to a minimum, encouraging them to check their records regularly.
What Companies House charges to third party information consumers is a different matter. Presumably commercial information providers would like Companies House to maintain a significant price differential between what they charge to supply ‘retail’ information to the public and what they charge ‘wholesale’. This differential allows information providers to buy company information in bulk, add value and be able to provide an attractive product at a price that is still competitive with Companies House retail prices.
However if Companies House are bound to charge for everything at cost plus a fixed percentage, it may be that it doesn’t cost them less to provide information wholesale than retail, given that their systems are automated. It might even cost them more. But if this situation has the effect of squeezing out commercial information providers then we lose the innovation and choice they contribute. On the other hand, should Companies House artificially inflate the retail price to the man in the street to create a margin?
I’m going to stay neutral on that one for now!
May 22nd, 2006 at 8:36 pm
Ian
With respect to your comments in your 19 May posting – Companies House is obliged to conform with the Re-use of Public Sector Information Regulations 2005 which can be found on the Office of Public Sector Information at http://www.opsi.gov.uk
The Companies House web site does not explicilty make it clear how Companies House complies with the Regulations 2005 nor does the Companies House web site make it very clear how it handles the Freedom of Information Act. Perhaps that explains why the Department of Constitutional Affairs report published on the 22 May 2006 “Freedom of Information Annual Report 2005: Operation of the FOI Act in central Government”, does not record any FOI requests for Companies House (unless they have been bundled under the DTI). A very different picture for other Trading Funds that produced data and other registries.
One of the impacts of eGovernment is that the public sector has moved down the supply chain which may have an impact on other organisations that operate down stream of the public sector organisations.