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Regulator’s salaries leap by 22% over five years

Average salaries for FSA staff have risen 22 per cent over the last five years from £41,975 to £51,232.

Figures from the regulator show staff at head of department level or below were paid an average of £51,232 for the year to March 2010.

Senior management wages have risen by 15 per cent since 2005/06 from £206,391 to £236,950. The enforcement and financial crime division saw the biggest rise, with average salaries increasing from £42,217 to £53,207 over the five-year period.

The supervision division saw average salaries rise by 14 per cent from £42,305 to £48,263, while operation division wages were relatively flat at £34,702 from £33,511 in 2005/06.

Between 2005/06 and 2009/ 10, the number of permanent staff recruited annually has gone from 425 to 500. The number of new recruits to the enforcement division went from 37 to 65.

A total of 283 permanent staff left the FSA in 2005/06, compared with 181 in 2010. In those totals, 32 left the enforcement division in 2005/06 and 16 left in 2009/10.

FSA chief executive Hector Sants says: “These figures reflect our tougher approach both to enforcement and supervision, which we have underpinned by bringing in more experienced people. It also reflects our success in controlling costs in the non-regulatory areas of the business.”

Highclere Financial Services partner Alan Lakey says: “I am struggling with additional fees to pay for these increases, so I am unimpressed. I understand the need to attract better staff but am concerned about the woeful lack of understanding the FSA seems to have in dealing with retail financial services.”

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  1. Says Hector Sants: “These [increased salary] figures reflect our tougher approach both to enforcement and supervision, which we have underpinned by bringing in more experienced people”.

    Hmmm. Given that experience of regulation can come only from actually working in a regulatory or regulated environment, one wonders just what experience these new recruits from other fields actually have. Or are they just people who happen to have gained a degree in something or other that happens to be vaguely related to financial services?

    Also, given the track record of the FSA and thus its staff not doing their job terribly well, we might reasonably question the validity of merely throwing yet more money at the problem, which seems to be the FSA’s solution to pretty well all its failings. Why no mention of enhancing training standards, reviewing management procedures, focussing more intently on the reasons for past failings, monitoring more closely the effectiveness of departmental activity, seeking ways to deploy resources more effectively and more cost-effectively and so on? Instead, at a time when everyone else in both the public and private sectors are having to tighten their belts and look for ways of doing things better, as opposed merely to more expensively, all Hector Sants has to offer is spending ever more money. Money, money, money! The solution to all ills, especially when everyone else has to cough it up.

    Again, this goes to the heart of the problem with the current regulatory framework ~ lack of accountability. Last Wednesday, Mr Sants claimed that he welcomes oversight from the NAO, though I suspect that in reality he made this statement primarily because to have said anything else would have been utterly indefensible. How could he possibly have said anything else?

    Will the NAO, for example, insist on a review of the FSA’s policy of paying generous yet, in the eyes of many, highly questionable bonuses to its staff and directors, not least when the result is that the FSA ends up £14m in the red? Mr Sants may well not be quite so welcoming of that kind of intervention ~ assuming, of course, that it or anything like it actually materialises.

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