According to the FSA’s Business Plan, most of the increase will be carried by large firms which will face more intensive supervision in the new judgement based approach to regulation being developed by the regulator.
Last year the Budget rose by 10% from £454.7m in 2010/11 to £500.5m for 2011/12.
In his forward to the plan, outgoing FSA chief executive Hector Sants says: “We recognise that the average increase in the FSA’s fees for last five years has been around 13%. This rate of growth cannot continue indefinitely, particularly when the financial services industry continues to be under pressure and so we would like to emphasise our commitment to ensuring direct costs of regulation are proportionate.”
Of the £578.4m budgeted for 2012/13, £32.5m is going towards the regulator preparing to switch to the incoming twin peaks regulatory structure. Last year that figure was £10.9m, an increase of 198%.
Part of the rise is also down to increases in staff pay averaging 3.5%.