The Northern Ireland Department of Enterprise Trade and Investment is to bring its oversight of societies such as the collapsed Presbyterian Mutual Society into line with Great Britain, The Newsletter reports today
The report in the Belfast published Newsletter continues: The £300m PMS suffered a run in 2008 and went into administration. The Treasury Select Committee (TSC), which holds the Treasury to account, later found that the 9,500 savers had been “innocent victims” of a “fatal regulatory gap” by government.
DETI rejected this, insisting it was not legally required to supervise the PMS nor to advise it to seek regulation; its only responsibility, it said, was to act as a registrar, collecting annual accounts for such Industrial & Provident Societies (I&PSs) and investigating any complaints.
The TSC, however, found that, in contrast, the Financial Services Authority (FSA) in Great Britain acts as registrar for I&PSs there, but goes much further and advises such societies on what business model they might adopt and whether they might require regulation.
The News Letter asked DETI this week what course of action it had taken to address issues raised in the TSC report.
A DETI spokeswoman said it was planning changes.
“Regarding I&PS legislation, the department intends to take forward proposals which will update the current framework in line with GB particularly in relation to improving corporate governance and disclosure during the mandate of the current assembly,” she said.
However, DETI insisted the primary responsibility for the collapse of the PMS rested with its directors, which was also a finding of the TSC.
DETI also noted that the Treasury had said there was no need to change the registration function for I&PSs such as the PMS.
Lisburn tax consultant and PMS saver Ivor McCandless welcomed DETI’s proposed changes.
“Maybe this will protect others in the future,” he said.
But it would have been difficult for DETI to make any such changes until the PMS crisis was virtually resolved, with refunds now expected in July, he said.
“It may have been inappropriate to make the changes earlier because it might have been seen by some as an admission of liability,” he said. “And government could then have had difficulty in bringing forward proposals to rescue the society.”
In a letter published in the Newsletter, WA McGimpsey, PMS Lobby Group Chairman, pays a particular tribute to NI Executive minister, Arlene Foster.
He writes: “Despite minister Foster’s heavy workload in the NIE, the assembly and in her untiring and successful efforts to bring employment and prosperity to all the people of our province, she has not spared herself in pursuing every possible avenue to bring closure to what at times must have seemed to her, as it did to us, an intractable problem.
“While we have had excellent support from many quarters; for example, members of the House of Lords, the Commons at Westminster and cross-party support in the Assembly, in the final analysis, minister Foster and her officials were crucial in achieving this very positive result.”