| Link(s): | Introduction to Budget Update 2023 | FSCS FCA announces next steps on improving the compensation framework | FCA Budget update | FSCS |
Context
FSCS Chief Executive, Caroline Rainbird, introduces the January 2023 Budget Update which covers the proposed 2023/24 FSCS management expenses budget and the latest forecast for 2022/23.
Key points to note
FSCS are proposing a management expenses budget of £99.8m (a 5% increase against the budget announced this time last year), to meet its running costs and customers are being helped to get back on track as quickly as possible.
The proposed budget includes a year-on-year reduction in volume-related costs, due to claims volumes being expected to remain broadly at the level they are now, which is lower than forecast this time last year. However, this reduction is offset by an increase in controllable costs due to inflation and the resulting price rises. Through very careful control of their spending, they have kept the increase within controllable costs to below inflation – at less than 6%.
Rainbird also notes that there is also a significant amount of regulatory change expected in the coming years, with landmark legislation coming through post-Brexit to help the UK identify opportunities to improve its rules and benefit from its position as a non-EU member. FSCS will also be working closely with the FCA and others on the next stages of the Compensation Framework Review, which the FCA recently published an update on.
Next actions
None – for information and awareness.