But under our new coalition government, these plans have been put on the backburner. So where does the FSA’s future lie?
The FSA has built its reputation on raising standards, setting benchmarks and clamping down on malpractices within the industry. For over a decade the FSA has prided itself on its accountability and transparency.
Currently, the new government’s key agenda is also concerned with transparency, particularly when it comes to expenses, salaries and spending.
Consequently, and in line with the Freedom of Information Act, the FSA has been making headlines with its own finances.
It has been revealed that at least 200 members of FSA staff earn between £100,000 and £199,999 a year, and 15 take home upwards of £200,000 – compared to the more modest salary of Prime Minister David Cameron’s £142,500. However, we are talking about comparing private and public sector wages. It’s no great surprise that they differ greatly.
In addition, £16 million was spent last year on consultants (mainly the Big 4), and despite under-spending its 2009 budget, this year’s budget has been increased by 10% to £454.7 million.
On the surface, this is a vast budget. However, the FSA is the solitary regulatory body for the entire financial services sector. To think that it requires anything less than significant funding would be naïve.
According to its website, “The FSA is a private company limited by guarantee, and funded by fees paid by those it regulates.” Just to reiterate that point: the FSA is a private company. It is an non-governmental body – a quango – that is paid by those it regulates to add accountability. I would suggest that as a private business, the FSA are undeniably successful (just look again at those enviable salaries and budgets).
The FSA are not government. They have always been a transparent organisation. And as long as the FSA remains a private organisation, the salaries and budgets will stay high.
Last year’s banking crisis proves that the financial service sector is in no position to self-regulate, so clearly the FSA will be around for some time yet.
It will be interesting to see how Cameron, Clegg et al approach reforming quangos, and how the FSA will be affected, if at all.
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Posted by: waseem | July 02, 2010 at 11:32 AM