In August last year the profession was burning with talk of radical change that would revolutionise the market.

Research consultancy Oxera, commissioned by the Financial Reporting Council and the Department of Trade, produced a report which found that the UK audit market was too concentrated and needed to encourage further competition and choice.

It was expected to blow open the audit market, and have ripple effect into other areas as companies looked outside the Big Four for audit, tax and corporate finance services.

A look at this year’s Top 50 survey, however, suggests that despite all the fanfare kicked up by the Oxera report little has happened to change the structure. In fact, rather than a reduction in the gap between Big Four and other firms, it has actually widened.

Last year fourth-ranked firm Ernst & Young submitted revenue figures of £945m compared with the £284m of Grant Thornton. The £661m gap between the two firms has since grown by a further £82m. Ernst & Young revenues for this year’s Top 50 come in at £1.13bn and Grant Thornton’s figures, which include the merged Robson Rhodes, sit at £387.1m.

Does this mean that that the FRC and DTI have already failed in their attempts to bridge the gap between the Big Four and the rest?

An Ernst & Young spokesman believes that this is not the case at all.

‘If you look at our numbers they are for the 2006 financial year, whereas other firms have provided forecasts for where they think they will end up this year. Our figures still reflect the impact of IFRS and Sarbox work. When our results come out later this year those one-offs won’t be present and the gap is unlikely to be as wide as it appears now,’ the spokesman said.

Jeremy Newman, BDO Stoy Hayward managing partner, however, believes that the gap is widening, and widening in the area of market share, which he argues is far more meaningful than simply comparing revenues.

‘If you have a firm of £200m and a firm of £300m and both grow at 10%, the revenue gap between the two will grow even though the market share is the same. The important area to look at is market share, and the Big Four have been growing their market share,’ Newman says.

This year’s Top 50 numbers appear to bear this out. The average growth of the Big Four is 15%, compared with 12.7% combined average of the Top 50. More strikingly, the Big Four have outstripped their nearest rivals, BDO Stoy Hayward, Grant Thornton, PKF, Baker Tilly and Smith and Williamson, who could only muster combined growth of 11.28% between them.

Newman believes that the barriers to entry into the market dominated by the giant firms has played a role in the increasing gap. The real problem, though, is that a number of firms have simply failed to take up the Big Four challenge.

‘Firms outside the Big Four have lost market share because relatively few of them have made the investment necessary to grow market share. We have invested, but not many others have,’ he says.