The FSA will spend more than £300m on staff costs in the coming financial year it announced today, after proposing to up its annual fees by £117m.
It anticipates hiring more than 280 extra staff, taking it beyond 2,800 employees, to help it carry out its Supervisory Enhancement Programme, set up in the wake of the Northern Rock debacle.
Of the forecasted total budget of £415m for 2009/10, it anticipates £306.4m will be spent on staff costs which it says includes travel, training, recruitment and pension scheme deficit reduction contributions.
The budget, which will be finalised in April, is up £117m on last year, and the FSA says around £70m of that is due to "the cost of embedding and delivering higher quality supervision".
Additionally, "to support the enhancement of its supervisory process", the FSA says it will also be investing an additional £12m in technology and property infrastructure.
"The financial services industry is facing unprecedented challenges, which look set to continue in 2009, says Hector Sants, chief executive of the FSA. "We will need additional financial resources to meet these demanding priorities for the coming year."
Alongside its 2009/10 Business Plan, the FSA also today unveiled its consultation paper on regulatory fees and levies.
The Financial Services Compensation Scheme (FSCS) is set to increase its budget from £31.5m to £641.5m - just under 2,000% - for the next financial year, but the FSA says deposit-taking firms will bear the brunt in levies.
Despite proposing to up its annual fees, the regulator says small advisers will actually see a decrease in their payments, with one-man firms paying around £109 less than last year. Networks and nationals will pay more.
It pledges those firms requiring "the most regulatory work and engagement" will pay the most, such as banks and building societies, and estimates more than 10,000 small firms will pay lower fees.
The net cash cost to firms across the whole industry will be more than £1bn, it adds, an increase of more than £707m on the previous financial year.
Contact [email protected]IFAonline
Consistency and compliance vs. slower reaction time
Search for replacement to begin imminently
60+ £300bn ISA savings
Has technology moved on?
Total funds on list rise from 26 to 58