UK financial watchdog chair to step down amid FCA turmoil

Charles Randell will step down a year early as union contests 10% pay cut for Financial Conduct Authority staff

Last modified on Fri 15 Oct 2021 10.24 EDT

The chair of Britain’s financial watchdog is stepping down early amid a period of turmoil and staff pay cuts at the regulator.

Charles Randell, a former Slaughter and May lawyer, is to step down as chair of the Financial Conduct Authority and the Payment Systems Regulator in spring 2022 – a year early. He was appointed to a five-year term in April 2018. Randell, 63, said in a letter to the chancellor that “now is the right time” for a new chairperson to come in to oversee the FCA’s revamp.

The FCA has been at loggerheads with the Unite union over a proposed 10% pay cut for three in four FCA staff. Unite said staff morale was plummeting and that staff resignations were rising by the day.

Unite national officer Dominic Hook said the announcement showed that “the FCA leadership needs to make improvements, including dealing with low staff morale. Now is the time for the FCA to agree to staff demands that they engage with Unite.”

The union said staff were unhappy with changes being made under a transformation programme drawn up by the regulator’s new chief executive, Nikhil Rathi, who joined from the London Stock Exchange a year ago. The FCA’s workload has gone up as Brexit has handed more powers to UK regulators and the organisation is busy restarting initiatives that stalled during the pandemic.

The watchdog’s bosses are holding “town hall” meetings to explain the changes to staff, and the 10 members of its executive committee will also meet smaller groups of staff to listen to feedback.

Under proposals drawn up by the regulator, annual cash bonuses will be scrapped for staff and were also removed for the executive committee in April. New pay bands, which include different pay ranges for those based outside London, mean that 800 support and “associate grade” staff, the lowest two tiers, will receive a £3,800 pay rise.

The FCA, which employs 4,200 people, is also proposing 2% pay increases in each of the next two years for those who meet or exceed individual performance objectives.

However, the pay overhaul has not gone down well with staff, according to Unite. Hook said: “Staff across the FCA are joining Unite in unprecedented numbers and want their voices heard. The significant growth in trade union membership demonstrates that the recognition of an independent trade union at the FCA is long overdue.

“Staff at the FCA are demoralised by the consultation launched by the CEO in September and feel it is a poor way to reward FCA staff who worked tirelessly throughout the pandemic to deliver credit card and mortgage payment holidays that were a lifeline to people up and down the country.”

The union launched a staff petition on Tuesday to secure the right to be formally recognised to represent FCA workers, saying that staff membership of the union had more than quadrupled since Rathi outlined the transformation agenda.

An FCA spokesperson said: “Our colleagues have always had a choice about how they are represented and some are members of a trade union. There is a statutory process for a trade union seeking recognition.”

Randell said: “As the FCA prepares to implement its new wholesale, retail and data strategies under an established new executive, now is the right time for a new chair to carry on the close and continuous oversight of our transformation.”

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