Bank of England to cut staff expenses after £390,000 travel bill row

Bank Of England

The Bank of England is cutting meal and hotel allowances for staff after coming under fire over a £390,000 travel bill racked up by two of its economics advisers.

The central bank has for the first time published its travel and expenses policy to the public, following criticism by MPs over the “staggering” costs run up by US-based members of its financial policy committee.

Anil Kashyap, who serves as an external member of the Bank’s financial policy committee, spent £11,000 on a flight from Chicago to London. His colleague Donald Kohn was found to have separately submitted expenses for an £8,000 flight from Washington to London and £469 on taxis for one meeting.

The Bank of England’s new expenses policy, which comes into force in March 2019, says staff are only allowed to travel business class in certain circumstances, including overnight flights, flights lasting more than six hours, and when the Bank’s governors or policy committee members are working on “sensitive matters”.

Brad Fried, the chair of the Court of the Bank of England, said: “We found our current policy to be broadly in line with that of other UK public authorities. However, there were some areas where we felt it was appropriate to clarify and tighten our policy to bring it into line with those other organisations.”

Under the new policy, flights should be booked “as early as possible” and “where you are unable to choose the cheapest flight you must confirm … the reason”.

The central bank has also committed to cutting daily meal allowances and lowering hotel rates in some cities as part of its new rules.

Caps for hotel stays will range from £125 per night in UK locations outside of London to $325 (£258) in New York and Washington. The current travel and expenses policy does not stipulate a cap for hotel stays.

Meal allowances for an overnight trip will be cut from £50 per day to £40 and includes the “cost of reasonable alcoholic drinks, tax and gratuities”.

Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

The new policy also requires greater detail in expense reports and forces the Bank of England’s executive directors, as well as non-executive members of its governing body – the Court of the Bank of England – to release their expenses “proactively”.

Nicky Morgan, the Conservative MP and Treasury select committee chair, said: “Given the staggeringly high level of expenses claimed by some members of the Bank of England’s policy committees, the review of its expenses policy is welcome.

“The Bank must now ensure that the new rules are followed in both letter and spirit by all staff across the organisation.”

The committee plans to question senior bank staff over the new policy in the new year.

Powered by Guardian.co.ukThis article was written by Kalyeena Makortoff Banking correspondent, for theguardian.com on Friday 14th December 2018 14.41 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010

 

Have something to tell us about this article?

JefferiesAnd the Best Place to Work in the global financial markets 2018 is...