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NAO warns on high FCA staff turnover

High staff turnover rates at the FCA and Prudential Regulation Authority risk undermining confidence in the regulators, according to a report by the National Audit Office.

The report found that more than a third of staff at the FCA have less than two years’ service at the regulator and its predecessor, the FSA.

Staff turnover in 2013 was 9.7 per cent at the FCA and 11.7 per cent at the PRA.

The report says: “Current levels of staff turnover result in the consistent departure of skilled and experienced staff.

“This could undermine industry confidence in the regulators, pose a risk that know-ledge will be lost and impact on the regulators’ capacity to carry out their functions.”

The NAO found that the combined cost of the FCA and PRA is £664m for 2013/14, 24 per cent higher than the cost of the FSA in 2012/13.

NAO head Amyas Morse says: “These are still early days for the new regulators and there are encouraging signs that their new approaches are gaining traction. Attracting and retaining the right staff are vital to keeping this progress on track so both regulators need to tackle this issue.”

An FCA spokesman says: “We have the right team in place, with experience inside the regulatory regime and outside it, to build on the work of our first year.”

Highclere Financial Services partner Alan Lakey says: “High staff turnover is a concern. Continuity is important to ensure efficiency and good outcomes.”

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