This Personnel Today news roundup includes:
- Banks warned over long-term bonuses
- National Audit Office fails public body accounts
- Regional law firms take severe cost-cutting measures
Banks warned over long-term bonuses
The head of the Financial Services Authority (FSA) has said that banks which have agreed to pay staff a guaranteed bonus for more than a year risk heavy penalties.
In a letter sent yesterday to more than 40 financial services industry chief executives, Hector Sants said that using long-term guarantees to attract senior investment bankers could put banks in breach of the FSA’s new remuneration code. The new code covers all remuneration deals negotiated since the pay consultation opened in March, so bankers may see recently negotiated guaranteed bonuses revoked.
The FSA has come under fire for apparently failing to flag up the risk-taking that led to the current financial crisis. This week, the Conservative Party said that were it to come to power, it would axe the FSA.
National Audit Office fails public body accounts
The National Audit Office (NAO) has refused to approve the accounts of six public bodies, citing poor governance, unauthorised expenditure and a £155m loss of equipment.
The accounts of the Department for Work and Pensions (DWP), the Equality and Human Rights Commission (EHRC), the Treasury, the Ministry of Defence, Revenue and Customs, and the Home Office failed to meet requirements.
The DWP was criticised for having made an estimated £2.7bn of overpayments and £1.2bn of underpayments.
Amyas Morse, head of the NAO, said that he expected the pressure on the benefits system to worsen as the recession continues.
EHRC failed the audit for having made £323,708 of unauthorised consultancy payments. The commission and its leader, Trevor Philips, are also under fire from campaigners concerned that they are failing to appropriately address issues of equality. Three commissioners left this week over concerns about the organisation’s leadership.
Regional law firms take severe cost-cutting measures
Britain’s leading regional law firms, worse hit by the recession than their London counterparts, have been forced to take severe cost-cutting measures.
Dundas & Wilson (D&W), one of the oldest firms in Scotland, has asked its 659 staff to consider a 10% pay cut in return for an extra 18 days’ unpaid leave. Pinsent Masons, the second biggest law firm outside London, and Manchester’s biggest law firm, Halliwells, have already taken similar steps.
D&W staff will vote tomorrow on the cuts, which will affect all salaried staff – partners having already agreed to a similar cut, without the accompanying reduction in hours.
Managing partner Alan Campbell said: “We have to balance forecast revenues with costs, but we are committed to retaining talent wherever possible.”