Bank of England increases IT spending amid criticism

The Bank of England (BoE) has significantly raised its IT spending expenditure by 12%, to £98.8 million. The increase in the budget in the last year was £11.1m, up from £87.7m from the previous year.

The information was disclosed as part of a freedom of information request by the Parliament Street think tank.

A considerable portion of the budget is assigned to IT salaries. The figures show that a total of £48.9m is shared among 704 IT staff members under BoE's Governor, Andrew Bailey. Subsequently, the average salary in the tech team is a remarkable £69,000 annually. Other costs contributing to the budget include project expenses and IT support services.

However, the considerable swell in the IT budget has engendered some criticisms. Patrick Sullivan, Chairman of the Parliament Street think tank, criticises the governor's reluctance to show restraint amidst the current economic climate. Sullivan argues, "With sky high interest and the cost-of-living crisis hitting families hard, Governor Bailey should be showing restraint instead of embarking on a Kardashian style spending spree. Once upon a time Threadneedle Street was a shining example of prudence, these days it's more like an LA reality TV show."

In addition to the above, a related report last week uncovered that Threadneedle Street, the BoE's location, provided 4,460 staff with performance bonuses for the fiscal year ending in 2023. The highest individual bonus was £22,590, with over 400 personnel receiving rewards of more than £10,000. Furthermore, it surfaced that the number of Bank staff earning more than £100,000 annually has exceeded 500 people.

Despite this criticism, some firms have defended the Bank of England's inflated IT budget. Achi Lewis, Area VP EMEA for Absolute Software, notes, "Increasing tech investment is critical for driving efficiencies and protecting against security risks. Organisations like the Bank of England manage large volumes of highly sensitive data across a wide network of endpoints, so having high quality, resilient IT in place is an essential step forward."

Oseloka Obiora, CTO of RiverSafe and Cybersecurity expert, also advocates for the BoE's increased IT spending. Obiora asserts, "Beefing up IT investment is a critical step for organisations tackling the tidal wave of highly sophisticated AI-enabled cyber threats. The BoE manages very complex volumes of important financial data, that requires the highest levels of security, so these measures to increase tech support are a step in the right direction."

Similarly, Khalid Talukder, Co-Founder of DKK Partners, claims that the heavy tech investment is crucial for long-term monetary stability. He opines, "The BoE sits at the very heart of the UK's financial system, so this kind of heavy tech investment is critical for ensuring long term monetary stability. Cranking up IT budgets is sign that our aged central bank is finally catching up with the rest of the world."