§ Gillian Merron
To ask the Secretary of State for Trade and Industry if he has reached a decision on the future of Companies House following the review announced by the Minister for Competitiveness on 16 February 2000,Official Report, column 557–58W. 
§ Mr. Alan Johnson
The first stage of the review of Companies House has now been completed. I am pleased to say that the review has confirmed that Companies House is performing well, both in meeting its own objectives and targets and in contributing to the achievement of wider Government objectives such as our e-Government strategy. Its standards of customer service are high, as shown by the award in 1998 of its third Charter Mark, and customers are generally satisfied with the service they get from Companies House. Companies House is already providing a wide range of services electronically. The CH Direct service offers electronic access to images of all documents dating back to 1995. All the major returns (except accounts) can be filed electronically. Plans are well advanced to introduce facilities to incorporate new companies electronically and to simplify the process for e-filing generally following the passing of the Electronic Communications Act 2000. Companies House is on track to have all services available electronically well in advance of the Government target of 2005.
The functions carried out by Companies House—the incorporation of companies, registration of information about their continuing operations and provision of information to the public—are and will continue to be essential to ensuring effective, competitive markets. The Review has confirmed that those functions are best delivered by retaining Companies House as an Executive Agency and that there is a continuing role for the private sector in the delivery of Companies House services.
The issue now is how Companies House can perform even better in future. I want to see Companies House continue to improve the quality of its services, setting and maintaining high standards of customer service and responsiveness to customer needs. Customers rightly look to Companies House as a reliable source of accurate and up-to-date information and we must ensure that it meets those expectations. Companies House will need to continue to modernise to improve the quality, range and flexibility of its services. Its operation is increasingly based on electronic interaction with customers, rather than the processing of paper, and this trend will continue, in line with the increasing use of e-commerce throughout the economy. Companies House's main operating system is now some 15 years old. It lacks flexibility and is not best-suited to supporting such an operation. It will therefore need to be replaced. The transition to a new system will need to be managed carefully and taken step by step to ensure that there is no interruption in the business. Substantial investment in IT will be required over the next three years or so to achieve this. Funding will be available from the cash reserves Companies House 724W has built up during its period as a Trading Fund. This investment will lay the basis for an even more successful next five years.
The report of stage 1 of the review of Companies House has been placed in the Library of the House.
Stage 2 of the review is now starting and will be completed in the autumn. As I announced in February, this second stage will consider whether any changes should be made to the way in which Companies House operates, including its aims and objectives, targets and financial controls. It will also consider in more detail the costs and funding of the investment in new systems.