SECR legislation: an instrument that spent itself in a day

1 The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 (SI 2018/1155) were made on 6 November 2018 and, by regulation 2(2), have effect for financial years beginning on or after 1 April 2019.

The preamble states the powers relied on in full: 2“sections 416(4) and 1292(1) of the Companies Act 2006 and sections 15 and 17 of the Limited Liability Partnerships Act 2000”.

Section 416(4) is the whole hook. Read on legislation.gov.uk, it says: “The Secretary of State may make provision by regulations as to other matters that must be disclosed in a directors’ report,” adding “without prejudice to the generality of this power, the regulations may make any such provision as was formerly made by Schedule 7 to the Companies Act 1985.”

That is a general power to prescribe directors’-report contents, not a power drafted for an energy-and-carbon regime. Contrast ESOS: its enabling powersare Part 11 of the Energy Act 2023 — sections written specifically to create and amend an energy savings scheme. SECR has never had an equivalent Act. It exists because a directors’ report can be told to contain more, and in 2018 the Secretary of State used that power to tell it to contain energy and carbon data.

SI 2018/1155 is short. Its substance is three regulations, each doing the same kind of thing to a different limb of the audience: amending or inserting text into an existing statutory instrument that was not otherwise about energy or carbon at all.

On the face of legislation.gov.uk, the only amendment note against Part 7A reads: “F1 Sch. 7 Pt. 7A inserted (1.4.2019) by S.I. 2018/1155, regs. 2, 7.” Part 7A has never been amended since. The full scope tests, the disclosure list and the exemptions that sit inside it are the subject of SECR requirements, not this page — what matters here is that they live in that Part, and in no other document.

The preamble to SI 2018/1155 states, verbatim: 3“In accordance with sections 473(3) and 1290 of the Companies Act 2006 and section 17(6) of the Limited Liability Partnerships Act 2000, a draft of this instrument has been laid before Parliament and approved by a resolution of each House of Parliament.”

Section 1290 of the Companies Act 2006is headed “Regulations and orders: affirmative resolution procedure” and reads: “Where regulations or orders under this Act are subject to ‘affirmative resolution procedure’ the regulations or order must not be made unless a draft of the statutory instrument containing them has been laid before Parliament and approved by a resolution of each House of Parliament.”

That sequence — draft laid, both Houses approve, only then made — is the affirmative procedure. It is not the negative procedure, under which an instrument is made first and laid afterwards, taking effect unless either House votes within a set period to annul it. SI 2018/1155 is affirmative-resolution, and its own preamble says so in as many words.

Companies Act 2006 2section 416 carries note C3, recording that sections 415–416 are applied with modifications by SI 2008/1911 regulation 12B, as inserted (1.4.2019) by SI 2018/1155 regs 2 and 10, and as amended (6.4.2022) by SI 2022/46 — a separate climate-related financial disclosure instrument, not a SECR amendment (see §05 below). That is the only amendment note that touches SECR’s LLP limb at all, and it modifies the climate-disclosure application sitting alongside SECR in the same regulation, not Part 7A’s own text.

The instrument that did try to move company-size thresholds is 4SI 2024/1303, raising Companies Act size limits for periods beginning on or after 6 April 2025. Its regulation 5(3) states, verbatim: “In Schedule 7 (matters to be dealt with in directors’ report), omit paragraphs 6 and 7 and Parts 3 and 4.” Parts 3 and 4 only — Part 7A is not named.

Paragraph 20B(2) of Part 7A hardcodes £36 million, £18 million and 250 employees in the instrument’s own table, with no cross-reference to Companies Act 2006 section 465. An uplift to section 465 has nothing to travel along to reach Part 7A.

Both errors share a root cause: treating SECR as a live, regularly-updated scheme with its own regulator, the way ESOS is — see where ESOS gets its authorityfor the contrast. SECR is neither. It is a single insertion into the directors’ report disclosure duty, made once in 2018, reviewed and enforced through the ordinary Companies Act accounts machinery ever since.

ESOS has a purpose-built Act — Part 11 of the Energy Act 2023, set out at ESOS’s enabling powers — and a live stack of amending regulations catalogued at the ESOS regulations, instrument by instrument. SECR has one general Companies Act power, one amending instrument, and nothing since. See ESOS vs SECR for how that difference in statutory footing plays out in enforcement and scope, and the SECR overview for the regime in the round.

Authority Sources

1. The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 (SI 2018/1155, made 6 November 2018, legislation.gov.uk)
2. Companies Act 2006, section 416 (the enabling power, subsection (4))
3. Companies Act 2006, section 1290 (affirmative resolution procedure)
4. The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024 (SI 2024/1303, size-limit uplift in force 6 April 2025)
5. Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (SI 2008/410 — Schedule 7, Part 7A carries the operative SECR text for companies)
6. Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008 (SI 2008/1911 — Part 5A / reg 12B carries the LLP text)