FSCS pledges to cut costs as management expenses levy cap set at £73m


The FCA has confirmed the FSCS management expenses levy limit will be set at £72.7m for 2016/17.

The figure is unchanged from that proposed in January and represents a 2.5 per cent year-on-year fall. It is divided into a budget of £67.4m and a contingency fund of £5.3m.

In its response to the consultation, the regulator says the lifeboat fund is committed to lowering costs over the next three years through “process efficiencies, increased automation of claims handling and through investments in its IT infrastructure”.

The FCA says: “Since 2010, the FSCS has been making significant investments to improve its processes and its ability to quickly scale up its claims processing operations. The FSCS anticipates that the costs of the strategic change programme will decrease by 19 per cent between 2015/16 and 2016/17.”

A review of the FSCS is due to take place imminently following the publication of the Financial Advice Market Review. FCA chairman John Griffith-Jones has previously said the review will focus on fairness of the levy to IFAs.