FOS bows to pressure to cut budget by 11%

Laura Miller
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The Financial Ombudsman Service (FOS) has listened to industry complaints about the burden of regulatory cost and cut its budget by 11% for the coming year.

The service said taking into account the feedback it received on its consultation on the issue, it has set a reduced operational income budget for 2015/2016 of £223.9m.

This budget will be funded by a combination of levies and case fees.

The overall levy for the 'compulsory jurisdiction' - which includes advisers - has been frozen at £23.3m.

Also frozen is the levy for the 'voluntary jurisdiction' - which includes general insurance firms and money lending - which will remain at £0.6m.

The Financial Conduct Authority (FCA) will be consulting separately on the allocation of the levy for the compulsory jurisdiction.

The FOS said it expects to receive around £51m in case fees - which firms who are complained against pay - of which around £0.7m will come from the voluntary jurisdiction.

Individual case fees paid by complained about firms have been kept at £550, and the FOS will continue to give each business 25 free cases so that the vast majority of businesses still pay no case fees.

Where your money goes

staff and staff-related costs £220.0m

professional fees £6.2m

IT costs £7.3m

premises and facilities £25.3m

other costs £3.0m

depreciation £6.0m

bad debt write-off £0.5m

contingencies £2.0m

total operating costs £270.3m

total operating surplus/deficit (£46.4m)

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