We welcome the overall 7.4% reduction in the budgeted FSCS management expenses but continue to be frustrated by the lack of detail about this expenditure, and therefore lack of opportunity to comment on it.
An almost permanent feature of MELL budgets is the “management of strategic change portfolio” which is not adequately explained beyond “investments in changes to the FSCS’s processes, operations and systems”. Such constant spending – apparently without efficiency gains - has to be justified. It forms 18% of the 2015/ 16 budgeted management expenses and appears to be an additional IT expense to the IT spending in continuing operations.
Unclear from the MELL (and from the financial statements) is how much is spent on advertising, particularly on television and radio campaigns.
Rather than provide budget information in the MELL consultation, stakeholders are instead referred to a separate FSCS plan and budget document on a separate website. That simply is not good enough. Information about how levy payers’ money, which, in the case of building societies is ultimately their ordinary members’ money, is to be spent should be available within the same document, the MELL consultation. If a financial institution presented its plans this way, the regulator would be quick to criticise.
The Building Societies Association represents all 44 UK building societies. Building societies have total assets of over £330 billion and, together with their subsidiaries, hold residential mortgages of over £240 billion, 19% of the total outstanding in the UK. They hold over £240 billion of retail deposits, accounting for 19% of all such deposits in the UK. Building societies account for about 28% of all cash ISA balances. They employ approximately 39,000 full and part-time staff and operate through approximately 1,550 branches.
Members and associates will find more information in this policy brief.
16 February 2015