Member Article

Treasury ‘didn’t see crisis coming’ report reveals

HM Treasury have published a review into their handling of the financial crisis, and the lessons learnt.

Although the report does not go into finite detail, but admits the Treasury, like other institutions, was under-resourced at the time.

In candid interviews, two Senior Treasury officials revealed their frustration at levels of staffing, and resources.

One said: “In retrospect, we did not gear up nearly enough. We should have had five teams and 100 people, not two teams with 30.”

Another commented: “From July 2008 to January 2009, I was working 7am to 10 or 11pm seven days a week, with no let-up thereafter. I felt under extraordinary pressure from July-October. I often had only three to four hours sleep, but always went home. I was constantly asking for more people.”

The review suggests that ‘peak’ staffing in 2009 should have come earlier, in the summer of 2008, to adequately equip the institution.

Following the collapse of Northern Rock in the autumn of 2007, the review also highlighted the team assembled to respond to the challenges were not experienced in banking, and the majority of staff were forced to ‘learn on the job.’

Commenting on the review, Sir Nicholas Macpherson, Permanent Secretary to the Treasury, said: “I’m very grateful to Sharon and her team for their work over the past six months.

“This report will help the Treasury learn the lessons of its handling of the financial crisis which started five years ago and ensure the department has the right capability to fulfil its duties in relation to financial services in the future.”

In her forward to the review, civil servant, wrote: “Looking ahead, the Treasury will need deeper expertise – ‘generalists’ with greater experience and some financial sector specialists – if it is to play an effective role in the new regulatory arrangements.

“This may necessitate a different career path for such professionals that takes them between the Treasury and outside financial institutions and regulators.

“It may also require stronger incentives for staff with experience to remain at the Treasury for longer.

“This in turn will mean tackling organisation-wide issues, most notably high turnover and low pay relative to the rest of the public sector.”

This was posted in Bdaily's Members' News section by Tom Keighley .