26th October 2020

Streamlining the Quango State

I receive several learned papers ever week. The latest is called “Streamlining the Quango State” and is by Professor Tim Ambler. 

His paper looks at the all the quangos and suggests that that a serious restructuring could cull over 33,000 of these economic parasites and save £3.2bn pa.

Ambler: “The most expensive, albeit to the sector rather than directly to the taxpayer,and the most unnecessary regulator is the FCA, born in 2013, which cost £589 million in 2018/19.  

It prides itself on resolving PPI complaints, but the Financial Ombudsman dealt with most of those. This body (FOS) cost another £270 million for the year. The FCA had 3.951 staff members, 35% being supervisory, yet most of the major work was contracted out to consultants. 

Financial advisors do not need rule-setting by the FCA but should have their own private sector professional body akin to accountants and actuaries….

How about that? Regulation overseen by a professional body. Where have we seen that idea before? Oh IFAA 5 years ago. Are the current professional bodies capable of that role? Yes, with some serious and much needed restructuring.

Ambler continues “With the benefit of hindsight, it was always unrealistic to expect regulators to plan for, and commit, hara-kiri. A better solution would be to convert all regulators to ombudsman or merge the former into the latter where both exist, as in finance, for the same sector”.

“a competitive market needs an ombudsman whereas it should not need a regulator.”

As many of our readers know IFAA and Financial Planners United are encouraging advisers to write to their MPs to request them to contact The Treasury Select Committee’s Chairman Mel Stride. So far we have been notified of 70+ MPs already contacted although there is certainly more.

The more that MPs ask for this the more likely this is to happen. Select Committee Chairmen are extremely sensitive to backbench pressure.

Libertatem

Regulation