Finance

Cost of FCA’s voluntary resignations balloons to £7m

The cost of UK’s Financial Conduct Authority’s  “voluntary resignation programme” has jumped almost 11-fold on initial reports, according to the watchdog’s latest figures.

Financial News reported in June that the regulator had paid out £640,100 in severance payments for 93 senior staff who took advantage of the regulator’s so-called mutually agreed resignation scheme, or Mars, in the year to April. That was according to FCA responses to a Freedom of Information request by FN.

The FCA’s annual report for the year to April, published on 15 July, said the cost of the scheme to more than £7m, however.

A person familiar with the matter said that the £7m related to severance payments projected to be spent under the Mars programme in the coming months.

FN‘s FOI found that eight of the FCA’s directors and heads of departments, 53 of its managers and 32 of its technical specialists had opted to resign in return for up to a year’s salary. The news prompted fears that star workers were fleeing the watchdog just as it battles the twin crises of Brexit and the pandemic.

READ  FCA loses 93 senior executives as Brexit and Covid workloads soar

The employees had jumped during a somewhat narrow window of opportunity, FN found — the scheme was opened to FCA directors and heads of departments from February to March 2020, according to a person familiar with the matter. It was then extended to managers and technical specialists for five days in February 2021, the person said.

In the FCA’s annual report, the regulator said it had opted to run the scheme in the 2020/21 financial year to give “eligible colleagues the opportunity to apply to resign from the FCA with a severance payment”.

It added that severance payments for those participating were “calculated according to base salary, age and length of service and capped at £100,000”.

“The key objective of Mars was to support the FCA’s diversity agenda through enhancing talent mobility and career progression,” it said. “Mars has resulted in the creation of significantly more opportunities for promotion… especially at Managerial level where we have historically had lower rates of turnover and a less diverse profile.”

To contact the author of this story with feedback or news, email Lucy McNulty

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