Innovation and changeGovernment TechnologyThe Bank of England needs to modernise practices to maximise savings

The Bank of England needs to modernise practices to maximise savings

Bank of England acknowledges that there is a significant potential to modernise practices for savings in technology systems and support

Parliament’s Public Accounts Committee (PAC) says it is not yet convinced that the Bank of England’s new vision for central services is sufficiently clear. PAC believes that the bank has not fully considered the changes it could make to modernise practices and maximise efficiency savings.

The bank expects transformation programmes to deliver £15 million of annual savings from 2021–22 – and had plans to deliver a series of change programmes to improve central services.

PAC, through its report released on 13 March, feel that modernisation must see the Bank of England practice what it preaches. The report highlights that the bank has failed to enforce compliance internally undermines its credibility to demand compliance from others.

The report says that further action is needed on staff diversity, outdated processes, and the overall vision to modernise practices. It feels the bank must think harder about its property portfolio, including scope for a more prominent regional office.

This follows a report from last year by the National Audit Office (NAO) which urged transformation at the Bank of England. Last year, the FCA and the Bank were looking at how technology could potentially improve the efficiency of the current regulatory reporting process.

Coherent vision needed

Chair of the PAC Meg Hillier MP said: “The Bank of England wants to overhaul its ways of working but it is still not clear what this will mean in practice. Without a coherent vision it will not be possible for the Bank to make informed decisions about the people, technology and locations it needs.

“Poor preparation has been the ruin of many projects examined by the Public Accounts Committee and, indeed, runs counter to the Bank’s own ethos. While we are encouraged by the Bank’s commitment to develop a clear vision, the devil is in the detail and we expect the Bank to explain how it will ensure financial savings and other benefits are realised.

“We would also like clarity on the action it will take to meet its diversity targets, rationalise its property portfolio and modernise processes that are, in many cases, needlessly complex and costly. It was concerning to learn that staff had faced no disciplinary action for violating the Bank’s outmoded procurement policy some 200 times in a year.

“The Bank’s credibility is at risk if it is perceived as failing to keep its own house in order. As part of this transformation project, we urge it to aim for 100 per cent compliance with all its policies.”

Conclusions from the report

With regards to technology, the bank’s technology operations and HR cost £101.4 million and £15.8 million respectively in 2017-18. These costs are expensive compared with public sector benchmarks. The bank acknowledges that there is significant potential to make savings in its technology systems and support. The report also concludes that the bank’s ICT systems are expensive.

Other conclusions are that the bank does not have an overarching strategy in place. This is towards its confidence that it will achieve savings worth £15m a year from 2020-21. The report points out that the bank’s failure to enforce compliance with its own policies undermines its credibility to demand compliance from others.

It says that the bank is off its diversity targets and it also doesn’t know how to best use its valuable property portfolio.

The bank has to report back its plans by June 2019, as per the recommendations. They need to elaborate on meeting diversity targets, optimising the value of its assets, and simplifying its staffing structure.

The report asks the bank for 100% compliance with its policies. Additionally, it should have a systematic approach to benchmarking itself against other organisations.

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