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FSCS ups management expenses budget by £3.5m

FSCS chief exec Mark Neale speaking at MM In Focus

The FSCS is budgeting an extra £3.5m to cover the cost of running the scheme this year.

The management expenses levy, which is used to cover the cost of administering the scheme separately from any compensation payments made, proposed for 2018/19 by the FSCS today is £77.7 million, up 5 per cent on the previous year.

As part of the budget the FSCS is putting an additional £1m investment into digital and outsourcing projects. It is also increasing the capacity of its borrowing facility in the event of a major firm failure from £1.1bn to £1.45bn, incurring an extra £1.7m in bank charges.

The figure includes a contingency reserve of £5m has also been put out to consultation, a slight decrease from the £5.3m built into last year’s budget.

The money is used to cover operating expenses like IT, outsourcing, legal and claims handling costs.

The amount of compensation the FSCS expects to pay out, levied separately by the lifeboat fund, will be confirmed in early April, as the regulator continues its own consultation on the future of funding reform.

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