Laura WilesPRA has published a policy statement which contains its final policy following its consultation on the FSCS Management Expenses Levy Limit (MELL) 2023/24.
The consultation proposed a MELL of £109.8 million for 2023/24, which included:
- the FSCS management expenses budget of £99.8 million to cover ongoing operating costs, including staff, facilities, claims handling, legal and other professional services, and a long-term investment plan; and
- an unlevied reserve of £10 million which allows the FSCS to raise additional funds at short notice to meet costs that were not foreseen, without the need for further consultation and rulemaking by FCA and PRA.
At the point of consultation, the FSCS forecasted an underspend of £6.3 million compared to the 2022/23 management expenses budget. Since publication, it has confirmed that the forecasted underspend is now £8.3 million. The consultation had stated that if this forecast materialises, then these funds would be used to offset the levy for the relevant classes in 2023/24. Therefore, if this updated forecast materialises, and the unlevied reserve is not utilised in 2023/24, then the total levy paid by firms will be £91.5 million.
PRA received no responses to the consultation, so the policy proposals will be implemented as consulted on. FCA also made its respective rule for 2023/24 MELL.
The MELL will apply from Saturday 1 April 2023, the start of the FSCS financial year, until Sunday 31 March 2024.