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| National Audit Office
needs full access to Financial Services Authority - MP |
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When Northern Rock asked the Bank
of England for financial support, Northern Rock's customers withdrew £4.6 million over just a few days
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Commenting on Commenting on the publication of the Commons public accounts committee’s report into the nationalisation of Northern Rock, South Norfolk MP Richard Bacon, a member of the committee, said:
“As head of the National Audit Office (NAO), the Comptroller
and Auditor General is Parliament’s financial watchdog and he can audit
any government department at any time he chooses.” |
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“However, when it comes to the work of the Financial Services Authority the Comptroller and Auditor General and NAO must currently wait for an invitation.” “If the NAO had been able entirely at its own discretion to undertake studies of any aspect of the work of the Financial Services Authority, then the weaknesses in the Tripartite regulatory arrangement between the Treasury, the Bank of England and the Financial Services Authority would almost certainly have been identified much earlier.” “In these circumstances, it is also likely that the problems at Northern Rock would have been identified sooner. In the event, once the bank went bust the Tripartite Authorities found themselves totally out of their depth.” “The National Audit Office is one of the world’s leading supreme audit institutions and it is absurd that such a body should not have total unfettered access to a regulator such as the Financial Services Authority in order to audit any aspect of the FSA’s work.” Mr Bacon was speaking as the Commons public accounts committee published its report into the nationalisation of Northern Rock. The Comptroller and Auditor General (C&AG), who is an officer of the House of Commons and the head of the National Audit Office, has a statutory remit to audit the accounts of all government departments and agencies as well as a wide range of other public bodies, and reports to Parliament on the economy, efficiency and effectiveness with which these bodies have used public money. The current C&AG is Mr Amyas Morse. The report finds that the C&AG has not been able to report on the regulatory activities of the Financial Services Authority (FSA). The FSA currently lies outside his statutory remit although he may undertake an audit if invited to do so by the Treasury. Since the FSA was established in 2000, the C&AG has only been asked to report on the work of the FSA once, and then only within a narrow remit defined by the Treasury and the Authority. The FSA is a company limited by guarantee and is funded by a levy on the financial services industry. The C&AG already has power to report on the work of other regulators funded by industry levies, such as Ofgem and Postwatch, and has been able to audit companies limited by guarantee since 2007. 25 June 2009 |
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| © Richard Bacon 2010 | ||||||||
PAC REPORT: