Martin Swain found a new home at Companies House almost a year ago. He tells Colin Marrs about the organisation’s intersection with the business and public sector worlds
Photos: Companies House
Last year, after 26 years working for the Welsh Government – and, before 1998, the Welsh Office – Martin Swain decided he needed a fresh challenge. Shortly before Christmas he made the move to Companies House, which is also based in Cardiff, as director of policy, strategy and planning. “I’m 48,” he says. “It would be a shame not to experience something different.”
A major driver behind his decision was a conversation he had with chief executive Louise Smyth, who had arrived at Companies House the previous year with a brief to oversee a major shift in the organisation’s role. “The chance to be involved in transformative change was hard to resist,” he says. “And my role is operational, so decisions I make have an impact instantaneously, which in the civil service can be quite unusual!”
Since the creation of the public register of companies in 1844, the main function of Companies House and its predecessor bodies has been almost purely administrative. But change is afoot, with the body set to take on new powers which will significantly increase its remit and alter its focus. “We won’t become a regulator of companies, but will become more regulatory in our approach and more assertive in our approach,” Swain says.
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Earlier this year, the government launched a major consultation into proposals, which would boost Companies House’s ability to help prevent and detect corporate wrongdoing and other types of crime. The measures would increase the amount of information companies are required to provide, and allow the executive agency to more easily share the information with other parts of UK law enforcement.
The government has yet to produce its response to the consultation, but Swain seems confident the proposals will receive support. “The general thrust is that they have received pretty much wholesale backing,” he says. “Respondents think Companies House should have more assertive powers so that we can intervene where things are happening on the register that shouldn’t be happening. And that we should be allowed to become more proactive.”
One of the biggest changes, aimed at tackling fraud, will be to collect more information about company directors to verify their identities. The move has been made in response to a number of high-profile money laundering scandals uncovered over the past decade. “The world economy has changed in the past five to 10 years,” Swain says, “and there is a weight of evidence that UK companies have been used to help facilitate some of that fraud.”
Companies House is set to harness digital technology to help it fight crime. Swain is confident about the capabilities of his in-house digital team. “We have got lots of digital expertise so we can build a lot of what we need, but we work on a mixed model where we build what we can but buy in things where we haven’t got it. This helps us operate more quickly than a central government department.”
The plans are nothing if not ambitious. Firstly, Companies House will need to build an identity verification system that works quickly, smoothly and on mobile phones. “The last thing you want is a really clunky verification process that takes days,” Swain says. “In the world of commerce, some of these decisions around companies are happening really quickly. If you’ve got a company being bought out of administration, it’s got to happen really quickly.”
The agency is also looking to create systems to allow data sharing with other government organisations. A recent pilot project compared accounts data submitted to Companies House with data provided for tax purposes to HM Revenue and Customs. “We found immediately that there was around £14m worth of discrepancies and we think there’s probably about another £100m worth of error, which could be fraud.”
Technology offers a panoply of opportunities, Swain says. “We would like to be able to use machine learning and artificial intelligence to throw up indicators of potential fraudulent activity – things like directors being appointed and changing within a short period, or significant changes to turnover. Also, if a law enforcement body says to us that they are interested in a particular individual, we would like to be able to track them across companies.”
Swain hopes that the outcome of the consultation will lead to a major shake-up of the Companies Act to allow such processes. “We already work really closely with the National Crime Agency and Serious Fraud Office. But at the moment, although we can provide specific information they ask for, we can’t proactively share it. That is one of the changes we are looking for.”
In September, a report commissioned with parent ministry the Department for Business, Energy and Industrial Strategy estimated the value of Companies House data to users at between £1bn and £3bn per year. However, unlike some other government agencies, there are no plans to charge for any of the data on the companies register – which has not always been the case historically.
Swain says: “If you look at registers overseas, a lot of them charge for a lot more of the data than we do. But we think that there is a value that comes from them not having to pay, and therefore that’s helping them in terms of their profitability. There is also the wider social good that comes from transparency groups and the press being able to freely access the data and help identify fraudulent and criminal activity.”
The changing role of Companies House is being accompanied by organisational transformation. As digitisation increases, the organisation is redeploying staff from the administrative areas of filing and search to the new investigation and compliance functions. This process means that the body will meet its annual target of 3.5% efficiency savings without reductions in its headcount, Swain says.
“Working for Companies House is probably the closest you can get to working for a commercial organisation while being a civil servant”
For an organisation undergoing such major change, staff are remarkably content. The 2018 Civil Service People Survey saw Companies House achieve an engagement score of 69% (with a 92% completion rate). This made it the top scoring civil service department for organisations of 400-999 employees. “I’ve never worked anywhere that has such a high level of engagement among its people, has such a positive vibe, pretty much from everybody in the organisation,” Swain says.
He points to a cadre of “culture champions” who have been appointed at all levels of the workforce to explain changes in the role and functions of the organisation. He says: “They are the ones having the conversations. The key thing is people are not thinking ‘this is being done to us’. The people they are working with day-to-day are telling them it’s a good thing.”
Outside work, Swain is an active mountain biker, regularly tackling the trails of the Rhondda Valley in his spare time. And there will be plenty more mountains to climb in his day job.
Companies House will next year become part of central government, after previously operating as a trading fund. The move will see the launch of a new five-year strategy, and Swain says he is keen to stick around for the ride. “We are all so committed to the transformation,” he says. “Working for Companies House is probably the closest you can get to working for a commercial organisation while being a civil servant. It is all about the service we provide to our customers. It’s the best of both worlds – public and private.”