Fears over standards as BSI plans to float

Standards experts have given a mixed reaction to plans being drawn up for the possible stock market flotation of the British Standards Institute.

The BSI, a Royal charter company which retains its profits rather than distributing them to shareholders, said it needed an injection of capital to grow and compete with other inspection and registration bodies around the world. It is in talks with the Department of Trade and Industry over changes to its charter, which would allow a flotation to go ahead.

The BSI’s standards division could find it hard to persuade engineers to work on its committees for free, as they do now, if the company is geared towards generating profit.

John Caddick, chief engineer at inspection company Zurich Engineering, said: `Industry funds the standards division by providing membership of committees. Flotation plans would have to recognise the time people put in. There would have to be a wall between the two parts of the company for it go ahead.’

A BSI spokesman said standards would be protected. `If we went down the flotation route the ringfencing would be even stronger.’

Steve Eyles, chief executive of the Gauge and Tool Makers Association, said: `If this adds value and takes out costs then it will be a good thing. But if it goes the way of rail privatisation then it will be a disaster.’

The BSI has doubled in size since 1996 through acquisitions, including the £36m takeover of commodities tester Inspectorate last year. Its annual turnover is £200m, which it believes it must double if it is to compete with other inspection bodies.

But further expansion of the BSI could make it less efficient, according to a source who has worked with the company. `It is finding it difficult enough at the size it is now,’ the source said. `When an organisation says it is going to expand, you have to hope it has a handle on what it is doing.’