| Link(s): | Parliament veto needed to enhance FOS independence following governance change – Committees – UK Parliament committees.parliament.uk/publications/52201/documents/289967/default/ |
Context
The Treasury has recently published the consultation response to its FS Sector Strategy: Review of the Financial Ombudsman Service, in which it says that ‘the government will legislate to make the Chair of the FOS a government appointment’. The Treasury says this is in order to ‘align the appointment of the FOS Chair with other significant appointments in financial services, such as the Chair and CEO of the Financial Conduct Authority, and help to ensure appropriate oversight and accountability’.
Key points to note
A letter from the Chair to the Economic Secretary says that the Government should include a statutory lock for the Treasury Select Committee on the appointment and dismissal of the Chair of the Financial Ombudsman Service (FOS). A failure to do so risks jeopardising both the actual and perceived independence of the FOS whose responsibility is to resolve consumers’ complaints against financial firms without influence from the Government.
A statutory lock would mean provisions in legislation for the Treasury Committee to consent to the appointment or dismissal of the Chair of the FOS. This would mirror the Budget Responsibility and National Audit Act 2011, within which the Committee has the power to veto the appointment or dismissal of Members of the Budget Responsibility Committee, including the Chair of the Office for Budget Responsibility.
In her letter, Dame Meg Hillier points out that making the Chair of the FOS a Government appointment was not one of the options consulted on by the Government in its recent proposals.