Bank of England Under Fire for ‘Unconscionable’ Expenses
(Bloomberg) -- Flight costs amounting to 11,000 pounds ($14,000) and more than 400 pounds in taxi bills have been cited as evidence that the Bank of England needs to review its spending and not undermine public trust.
Simon Clarke, a Conservative Party lawmaker, said the figures had “disturbing echoes” of a scandal that rocked U.K. Parliament in 2009. The BOE said in a statement later that the figures cited were aggregated in its documents and covered two trips and six taxi journeys.
The questions from Clarke related to travel expenses submitted by external Financial Policy Committee members Anil Kashyap and Donald Kohn totaling 390,000 pounds over the past 2 1/2 years. At the appointment hearing for the new Chair of the BOE’s Court of Directors on Tuesday, Clarke also listed the costs of the central bank’s summer party and sports ground.
He said his constituents would be “gobsmacked” at the amount of money spent by the American economists on flights and cars to attend meetings in London. Court head Bradley Fried said that the BOE’s policy is to fly business class and he would investigate and report back to lawmakers.
“There’s been a tremendous contribution made” by the policy makers, he said. “I can’t quite work out a formulaic assessment of value for money against their participation versus the travel expenses but I hear exactly what you’re saying.”
Clarke also highlighted the 100,000 pounds spent on the central bank’s annual summer party in 2016 and questioned how “extraordinarily” subsidized membership for staff of its sports ground in Southwest London helped the BOE achieve its mandate.
This isn’t the first time the central bank has faced scrutiny over its spending. Following a freedom of information request, it last year published a selection of 2015 receipts for Governor Mark Carney’s credit card transactions that ranged from hotels at the World Economic Forum in Davos to two Greek yogurts at Heathrow airport.
Speaking at a press conference Wednesday, Carney sought to play down criticism of bank officials’ spending by pointing to the global prominence of London as a financial center and the international nature of the BOE’s work. He said his own totaled 312,000 pounds over 52 trips but were in part covered by reimbursements and salary for his role at the Bank for International Settlements.
“What’s important is that we’re good stewards of these public funds,” he said. “That we have the right policies, the right processes -- mine are signed off by the Chair of Court -- and that they’re reviewed periodically.”
Drawing comparisons to Parliament’s previous expenses regime, which ultimately sparked a scandal where hundreds of lawmakers were criticized for reimbursements they’d sought from the public purse, Clarke suggested the costs he’d identified were “unconscionable.”
The affair damaged the reputation of politicians from all the main parties and even led to some members of Parliament serving jail terms for filing fraudulent claims. Clarke wasn’t in Parliament at the time, having only been elected in 2017.
While there was no suggestion that any BOE claims were unlawful, he suggested the spending wasn’t providing the best value for money for U.K. taxpayers. There is “something awry with the culture that allows this kind of spending,” Clarke said.
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