Brexit & EconomyPoliticsTreasury rocked to the tune of £15m

Treasury rocked to the tune of £15m

Fallout from the lost data discs and the collapse of Northern Rock have cost the Treasury £15m

In its Spring Supply Estimate, the Treasury disclosed that it would need
£14.7m of extra funds to cover the ‘costs of work on
Northern Rock and
the Poynter Review,’ but stopped short of providing detailed breakdowns.

The figure is the first general estimate of what those who worked on both
issues may have earnt, with
PricewaterhouseCoopers chief
Kieran Poynter leading the HM
Revenue & Customs
review and investment bankers
Goldman Sachs
providing extensive advice over Northern Rock.

The extra cash had to be drawn from the government’s general bank account at
the Bank of England and it appears that the figure came to light because of
statutory disclosure requirements. The number was buried in a 28-page document
which requested more cash for the year ending 31 March 2008.

The costs are likely to have included fees paid to bidders as part of the
collapsed sale of Northern Rock.

The government has so far given no indication of the costs it has shouldered
as a result of the Poynter review of the loss of child benefit data discs. But
the fees are likely to be significant, given the profile of the review’s author,
and the fact that it has been going on for several months.

As well as being involved in the Poynter review, PwC will have earnt fees
from the sale of the bank, which it was also working on, it has admitted.

Investment bank Goldman Sachs was brought in as the lead adviser for the sale
of the bank. Other firms apart from PwC were involved in advising bidders,
according to Treasury insiders, making up part of the costs of the affair.

Auditors have already faced accusations of conflicts of interest in relation
to Northern Rock.

MPs were up in arms to discover that PwC earnt £70,000 a time for signing off
Northern Rock’s securitisations.

A Treasury source said: ‘The adviser fees for Northern Rock have since been
repaid to the Treasury by [the bank] and figures relating to fees on the Poynter
Review have been paid by HMRC.’

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