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FSA spending on staff recruitment hits £4.5m

A Freedom of Information request submitted by Mortgage Strategy reveals the regulator has recruited 737 staff in the past 12 months, spending on average around £6,151 for every new recruit.

The figures indicate the rate at which staff are leaving jobs with the regulator.

Earlier this year, it was revealed there was a 30% surge in staff leaving the FSA ahead of the new twin peaks regulatory model, with 430 permanent employees quitting in 2011.

It has also had to seek replacements for a number of high profile figures in the past six months, including a replacement for its head of enforcement, Margaret Cole.

The FSA appointed headhunting firm Sainty Hird to run the search process, which was looking at candidates from North America and Asia. The regulator has paid the recruitment firm £18,000 for its services in the past 12 months.

The latest research from recruitment specialist Hays shows that the average cost of recruiting a senior manager is £7,500 and £2,500 for other employees.

The shocking figures come as support for Mortgage Strategy’s Bring Down FSA Fees campaign gathers pace.

We have been inundated with support from brokers who are calling on the regulator to reduce its annual fee to mortgage brokers following the announcement in its 2012/13 budget forecast that they will rise by 9.2%.

Richard Fox, the former compliance director of the Mortgage Code Compliance Board – the previous self-regulatory body for brokers – says the issue is not so much the amount of money the FSA has spent, but more the fact that it has such a high turnover of staff.

He says: “The rate of staff turnover is horrendous. At the end of the day, the FSA should be promoting the interests of the public and the industry, not acting as a super government department that can just burn money.

“There ought to be enquiries about the level of money it spends in all sorts of areas.

“It is the consumer who eventually ends up paying the price through higher product costs.”

He adds: “The question is, is it offering value for money?”

However, a spokesman for the FSA says its staff turnover levels for this year are slightly down from last year, when they were 10.4%.

He says: “Our staff turnover is not as high as the figures suggest. We fill a lot of the roles internally so when people move to other departments we need to advertise for their roles.”

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