In a little noticed statement to Parliament on October 22, Exchequer secretary to the Treasury Sarah McCarthy-Fry said: “The NAO has a valuable role to play in delivering transparency and accountability, so I am pleased to announce today that the Financial Services Authority has decided to appoint the Comptroller and Auditor General as its financial auditor from the next financial year, 2010-11.
“That will enable the Public Accounts Committee to receive and investigate reports into aspects of the economy, efficiency and effectiveness of the FSA’s performance. I welcome that decision and believe that it can only enhance the FSA’s standing and enable it to show how well it discharges its business.”
Aifa director general Chris Cummings, who has campaigned for a regular NAO audit of the FSA, has welcomed the move and says the FSA must be held to account.
He says: “With a budget that has rocketed to nearly half a billion pounds a year, it’s critical that the FSA is held to account. We have always said that, as a statutory body, FSA must be more transparent and clearly demonstrate value for money. The appointment of the NAO ensures that the Public Accounts Committee can fully scrutinise FSA’s performance on a regular basis.
“NAO last conducted a one off review of FSA in 2007, following calls from Aifa and others in the industry. At that time, the NAO recognised the progress FSA had made since its inception in 2002, but stated that FSA had to do more to demonstrate its impact and provide a clearer indication of what its different activities cost. These points still hold true today.”
Cummings says the appointment of the NAO will help realise the relative effectiveness of regulatory interventions.
He says: “We can not just have change for change’s sake. There must be a clear and demonstrable benefit to consumers and industry. The NAO’s appointment is a big step towards achieving this goal.”