Last updated: January 31, 2014 4:32 pm

Bank of England to make up to 100 staff redundant

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Bank of England©AFP

The Bank of England is to make between 80 and 100 people redundant following a “value for money” review involving external management consultants.

The announcement on Friday follows the new governor Mark Carney’s decision in October to bring in consultants from Deloitte and McKinsey to help review the way the central bank operates.

Deloitte helped the BoE to look at its support services division, which employs about 1,000 staff. This review has “identified savings of around £18m by 2015-16”, the bank said in a statement. This would be “reinvested across the business in order to support delivery of the bank’s statutory objectives”.

The redundancies will be subject to staff consultation, and the central bank said it was working with the Unite union to ensure that affected staff received support to find alternative employment.

Unite said it would “strongly oppose” any compulsory redundancies. Dominic Hook, Unite national officer, said: “The Bank of England should be setting an example to other banks – not behaving in the same imprudent manner that others have been.

“This constant insecurity across the financial services industry is extremely damaging for the staff, who continue to work under the hardest of conditions.”

Besides the “value for money” review, McKinsey has been helping the bank to examine priorities, resources, working practices and allocation of time across the institution. The BoE said it would announce its new “strategic plan” in due course.

Mr Carney’s decision to hire consultants raised eyebrows in October, since it ran contrary to the government’s ambition to slash public sector consultancy expenditure and prevent what Francis Maude, the Cabinet Office minister, has called “taxpayers’ money [being] squandered on things like unnecessary consultancy”.

The Financial Times submitted a Freedom of Information application to ask how much the BoE had paid Deloitte and McKinsey. The request was declined “on the grounds that disclosure would be likely to prejudice the commercial interests of Deloitte, McKinsey and the bank”.

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