Last week's recommendation from MPs on the Business Select Committee (BEIS) to break up the big four accounting firms by splitting their audit divisions from consultancy is welcome news.

MPs have identified a conflict which the big firms are unwilling to deal with. If we want to avoid more audit scandals in future, a full separation is the best solution.

The current problems stem from the imbalance between audit fee and consultancy services. Audit fees have fallen, but the growth has been in other consultancy services, which has impacted on the quality of audits delivered.

For example, the audit fees for PWC account for 35% of total revenues, but PWC’s advisory fees are growing at 10% a year, and assurance is growing at 4%.

The growth is even bigger at Deloitte, where consultancy is growing at 15% at and audit at only 8%, so there is a strong incentive for the big firms to focus on advisory and consultancy, at the expense of the audit side.

A split would create new opportunities for smaller, specialist UK firms. Big firms often do not have the specialist skills needed to forensically examine a company’s operations to discover the ‘key pieces of the jigsaw’ that go into a successful claim.

Bigger companies tend to default to big advisory firms for their non-audit needs, but they may not be getting the best value for specialist services.

If smaller specialist agencies get the opportunity to work for FTSE350 companies on their innovation, they can significantly increase the flow of money returning to those businesses for further R&D.

For every £1 awarded to via R&D tax credits, between £1.53 and £2.35 is stimulated in further R&D expenditure.  What this means is that the £3.5bn claimed in tax credits in 2016-17 by UK businesses could deliver £8.1bn of R&D expenditure in future.

It makes sense for regulators and policymakers to do more to encourage the market for consultancy services to open up and I urge the government and regulators to accelerate this process.

Luke Hamm is CEO GovGrant.