Experts have warned the success of automatic enrolment will be put at risk if The Pensions Regulator is forced to accept a 9.5 per cent budget cut in 2015/16.
Last week, Chancellor George Osborne delivered his spending review speech to Parliament and set out departmental budgets across Government for 2015/16. The Department for Work and Pensions is facing a budget cut of 9.5 per cent.
A DWP spokeswoman says the Government has yet to decide whether TPR’s budget will need to be reduced in line with the cuts facing the department as a whole.‘pen
She says: “The plans will be worked through by the department as they always are when the Treasury announces a high level spending review.”
Following the 2010 spending review, the DWP’s overall budget was reduced by 25 per cent.
In April 2011, TPR confirmed its budget would be cut in line with the DWP budget over a four-year period. The regulator’s budget for 2011/12 was £42.1m.
In July last year, the regulator said a combination of lack of resource and unplanned calls on its resources meant some key aspects of its corporate plan for 2011/2012 were not delivered.
Aegon regulatory strategy director Steven Cameron says: “The ban on consultancy charging means advisers are less likely to help employers, which puts more onus on the regulator to make sure employers get the help they need through other routes.
“Having to do so with less money would be a challenge and presents a risk to the success of auto-enrolment.”
Hargreaves Lansdown head of corporate research Laith Khalaf says: “There is a big question about TPR’s ability to regulate and police auto-enrolment on a very limited budget. Clearly cutting its budget further would exacerbate that problem.”