Introduction
The Bank of England (the Bank) is responsible for monetary and financial stability in the U.K. In practice, it has a wide range of differing roles including: setting monetary policy; setting policy for financial stability; supporting financial markets; and the settlement of transactions. The Bank is primarily funded by income from interest-yielding financial assets and fees charged to bodies using its services. It receives no direct taxpayer funding or grants from government. Following the financial crisis, the Bank expanded in size and took on additional responsibilities such as the regulation of financial institutions.
The Bank had 4,202 staff in 2017–18 and cost £647 million to run. The number of staff in the Bank has more than doubled since 2011–12 when it had 1,796 full-time equivalent staff, largely because it absorbed the Prudential Regulation Authority in 2014. The Bank has committed to improving its effectiveness by 2020, focusing on the way it works and how it communicates. In 2017, the Bank introduced a headcount cap of 4,281 full-time equivalent staff and in 2018, it committed to capping its running costs at £476 million a year, excluding the cost of producing bank-notes and staff pensions. The Bank’s central services are responsible for Human Resources, technology, property, procurement, security and financial management. As such they have an important role in facilitating the changes needed to enable the Bank to work more efficiently and effectively and to control costs. In 2016, the Bank of England and Financial Services Act gave the National Audit Office power to examine the way in which the Bank uses its resources. This is the first time that this Committee has been able to examine the Bank’s operations.
Published: 13 March 2019