The estimated cost for regulated firms to prepare for the changes to the regulatory system has almost doubled in four months to £100m.
The Treasury’s impact assessment in its February consultation paper on the switch put the total estimated cost of the changes at between £50m and £60m.
But the Government’s latest consultation document, published last week, says: “The original range of transitional costs (£50m to £60m) is too low. The upper limit has therefore been increased to £100m. But this must remain a highly tentative estimate.” The paper says the revision comes after responses to its February consultation from “a small number” of dual-regulated firms who said the costs would be higher than previously estimated. It adds that the majority of firms will be regulated by either the Prudential Regulation Authority or the Financial Conduct Authority and that the transitional costs to those firms is “negligible”.
The estimated cost to the taxpayer for the switch remains unchanged since February at up to £175m.