Concerns about the financial viability of regulating barrister ‘entities’ have emerged after the Bar Standards Board’s decision to downgrade expectations of income from the new business structures.
The regulator has reported that its income for 2015/16 is expected to fall 24% short of predictions, in part due to a low number of entity applications.
So far just 36 firms have been regulated as an entity, against a projected 400.
The regulator’s planning, resources and performance committee reported that income from entity regulation in the second quarter of the year was £6,000, compared with a predicted £126,000. It now expects income from entity regulation over the year to be £7,000 from a previous projection of £238,000.
The committee is forecasting total income for the year of £1.43m, against a projection of £1.88m.
At a BSB meeting last week, lay member Malcolm Cohen said the shortfall raised concerns about the amount of money being spent on regulating a ‘tiny’ number of entities.
He said: ‘Clearly in a business argument that is not very attractive and raises an issue about whether we have a more fundamental question or whether it is a timing issue.’
Vanessa Davies (pictured), director general, confirmed that the forecast on income for entities next year has been ‘scaled back quite substantially’, and said the ‘very important point’ about the lack of revenue is one which is frequently raised by the regulator’s finance director.
But she said that the job descriptions for the staff hired to handle applications were flexible so they could be redeployed to work in other areas when the number of applications was low.
It also emerged at the meeting that the expected launch date for the BSB’s alternative business structure regulation has slipped again, from the start of June to the start of October next year.
The BSB submitted its application to become an ABS regulator in April this year, but said that its ‘indicative launch date’ to start regulation had been put back due to the ‘extended consultation periods’ now required by the Ministry of Justice.