The PSA budget for 2017/18
For the PSA, the new financial year starts on 1 April. I am half way through my three year appointment so this seemed a good day to write my first blog. I’ll be doing this occasionally throughout the year to give some personal perspectives.
The PSA is first and foremost a consumer protection body. Our mission is to protect consumers from harmful practices on the one hand and to further their interests through promoting where we can competition, innovation and market growth.
And we accept that we need to do this economically as well as effectively. In the last two years we have worked hard to reduce the cost of regulation and provide certainty to businesses operating in the market. In 2016/17, consumer contacts to us were up by an estimated 40% on the previous year, we conducted 24% more investigations and handled 17% more complaints. We also launched a new code and set out a clear strategic vision. And we did that on a budget that was 11% lower than the previous year. I’m delighted that we are able to announce a reduced budget again this year. At £3.85 million, our 2017/18 budget is a 5% reduction in real terms on 2016/17. It is a 16% reduction on 2015/16.
We need to be sufficiently funded to perform our statutory duties and that is a balance that the Board strikes each year. But I am really pleased that in total, we’ve taken nearly three-quarters of a million pounds out of our budget over the last two years. We’ve achieved this through a combination of operational efficiencies and financial savings.
Reducing the direct cost of regulation
The reduction in our budget has also allowed us to cut the direct cost to industry of regulation. We have announced a reduced industry levy, down from 0.63% in 16/17 to 0.44% in 17/18 - the lowest rate it’s been since 2013/14.
Increased certainty
The Board has also announced that we intend to hold the maximum amount of our budget to be funded by the levy at the current level for the next four years. In other words, the amount funded by the levy will remain at a maximum of £1.875 million until 2020/21, unless we can reduce it further. This should give the industry funders greater certainty in their budget planning.
In part, we’ve been able to do this because of the increased fine income we collected in 2016/17. Sanctions levied against those that breach the Code must be effective. We are currently consulting on proposals that enhance the deterrent effect of our sanctions. When breaches occur they harm consumers and damage confidence. We would much prefer there to be no breaches and no fines – a market consumers can trust.