This was the Board’s last meeting before the end of the year and so it was nice to see more new faces in the meeting as we continue to build the staff team up, ready for the start of operational oversight from January.
It was also extremely rewarding to be able to discuss the results from the pilot of our new data returns process. We started this item by noting how positive it is that we received a full return rate from across all accredited firms, both large and small, without the need for any significant chasing. Given that this was a pilot and that we were asking firms to provide a wide range of information for the first time, this is very encouraging and provides another example of the industry demonstrating its commitment to oversight.
It is clear from the richness of the data that this process is going to make a significant contribution to the ECB’s evidence base and our understanding of the sector. In addition to sector wide trends, the team has also started to run reports on outlier firms in certain areas, which will provide some useful steers on where we might investigate further when we start proactive oversight visits and outreach.
The Board was pleased to hear of the plans for workshops with firms in the coming weeks to discuss some of the findings and potential amendments for the next full round of data returns. We reiterated our commitment to publish an anonymised, aggregated report of the findings after the next full round of data returns. This will allow this valuable evidence to be shared more widely, to support others with a stake in this area.
We moved on to discuss the results of the recent consultation on complaints and sanctions. Once again, we received encouraging, constructive and considered responses from a range of stakeholders. We considered some limited changes to our rules and guidance that the team had suggested, based on this feedback.
In particular, we discussed how our scheme will interact with existing ombudsmen schemes that cover some of the same types of issues as our scheme. In this regard, we talked about a recent meeting that I had with the Chief Ombudsman at the LGSCO. I sought to emphasise that the ECB’s entry into complaints handling in this area will open new doors and will not in any way close the existing doors for redress. We will provide a new, targeted and swifter route to independent determination of complaints about the acts of enforcement firms or enforcement agents. But members of the public will still be able to pursue complaints through local authorities and then to the LGSCO or other applicable ombudsman schemes if that is their preference.
Now that we have evidence from the data returns on the number of first tier complaints, compared with the number of complaints raised with other independent redress schemes, it is clear how much important work there is for the ECB to do, with our partners, to ensure people understand and are able to escalate their complaint when they feel it hasn’t been resolved by the firm. With this in mind, we believe that the priority should be to look for the opportunities that the ECB’s new role provides for collaboration and data sharing between the ECB and existing ombudsmen schemes, to work together to significantly improve the situation for the public.
On sanctions, a number of responses expressed concern that the decision to automatically publish all sanctions meant that in practice there is no gradation of sanctions as any published sanction would have a such a significant impact on the ability of the firm in question to continue operating. It is positive that published sanctions are seen as so significant, as this means that they should be a powerful deterrent to non-compliance and would bring real accountability if deployed. However, we recognise the points made and will introduce some further detail in the rules to provide assurance on how decisions to deploy published sanctions will be made. We also agreed to add the option of imposing some sanctions without publishing them, to provide the ECB with greater flexibility in how it can respond to breaches. However, the Board were clear that this would not prevent it from publishing sanctions where this was in the public interest.
The other main item on the agenda was an early scoping discussion about the ECB’s draft business plan and budget for 2025/26. The Board will have a fuller discussion on this when we next meet, in advance of a public consultation in February 2025. For now, our discussion focussed on two main points:
- We have already committed to significant work next year, including developing standards on vulnerability and ability to pay, successfully launching complaints handling and operationalising our oversight model. We agreed that this should be the main focus and we are clear that this is an ambitious workplan in itself.
- The ECB’s budget will inevitably increase this year as it is the first year for which we will have full staff costs for an entire year, including the operational teams to deliver complaints handling and oversight. The increase will be offset to some extent by savings in areas like primary research and legal costs. We will return to this in January when we have a draft budget and modelling for what the implications might be for the levy.
On behalf of the Board, I want to thank everyone who has taken the time to contribute to our work this year.
Wishing you all a joyful festive season.
Catherine Brown, Chair