REG Reviews

REG Reviews – April 2025

1st April 2025

Welcome to your April Edition of REG Reviews!

Last month, a new law was introduced to combat illegal online content, brokers struggled to tackle fair value rules, insurance associations join forces to wipe of misconduct in London insurance market and REG Technologies launched its Challenges and Risks Tracker to help insurers navigate their current counterparty risk management approach.

Read these articles and many more as we bring you all the important news and views in the insurance and financial services world…

Industry News​

Brokers face increasing regulatory burden due to stricter compliance laws

REGULATORY

How UK Brokers Are Tackling Stricter Compliance Rules

The intensifying regulatory burden is taking its toll on many brokers, particularly smaller players that see regulations such as fair value and consumer duty to be administratively more daunting.

The goal of these regulations is clear; “Improve customer outcomes and deliver great value for policyholders” as mentioned by Insurance Times.

However, the problem reported is that for brokers, this sheer amount of reporting, paperwork and administrative tasks has left them unsure how to proceed.

Some of the smaller brokers have even decided to sell their business rather than taking the responsibility for the enhanced rules and requirements.

According to Davis Spakes, BIBA’s Regulation Director; “The Consumer Duty provides that useful reminder, if one was needed, to focus on customer needs – something that brokers are particularly good at anyway”.

He also adds; “That part hasn’t added any amount of day-to-day work for brokers to do, because it’s their bread and butter – and the concept of Fair Value is certainly one we support, because it brings that welcome focus towards what customers are getting for their money, instead of just focusing on the price of the product. But, at the same time, there’s a lot of admin that’s part of the regulatory framework that goes with this, which members probably feel doesn’t add value.”

Moreover, Sparkes believes that “inconsistent and excessive documentation requirements” are the main issue, including how manual these tasks are with so many forms to fill in and documents to send.

While brokers’ concern should be taken into consideration by the FCA and the industry as a whole, right now these laws just can’t be neglected.

Adopting proper technology solutions to do the heavy lifting is one of the proposed ways brokers can adapt and stay ahead of the curve, and not be forced to take action such as closing business.

RegTech, in particular, automates all of these legacy processes Sparkes mentioned, and would easily enable brokers to focus more on their business, while letting the software automate all the manual processes that come with sharing, analysing and acquiring necessary information and data across the chain.

During REG’s recent webinar with Insurance Post, “Easing the Regulatory Burden to Allow Insurers and MGAs to Prosper,” Steven Folkard, Chief Risk & Compliance Officer at Jensten Group stated that; “Smaller players who don’t embrace tech will run the risk of not being able to deliver the processes they’re required to by the rules and regulations which presents regulatory risks for them and larger players will just naturally gravitate to it because it’s the commercially sensible thing to do.”

Branko Bjelobaba, Principal at Compliance Consultancy Branko, believes that brokers must “take ownership of the compliance process” rather than trying to run away from it.

Brokers who view regulation as just another expense may be missing the bigger picture. Investing in the right systems not only streamlines compliance but can also prevent costly fines down the line. In the long run, the price of non-compliance far outweighs the investment in the right tools.

Brain-Inspired AI Transforms Industry Dynamics

TECHNOLOGY

Brain-Inspired AI Transforms Industry Dynamics

Microsoft has partnered with Swiss start-up Inait to introduce an innovative artificial intelligence (AI) model that mirrors mammalian reasoning, potentially revolutionising sectors like financial trading and robotics. This collaboration leverages decades of digital neuroscience research, facilitating advancements in AI by mimicking biological intelligence. 

Richard Frey, CEO of Inait, which was established in 2018, stated; “We aim to unlock a novel kind of AI by mastering brain-like intelligence.” The firm’s technology is set to transform how digital brains are taught, focusing on major industry challenges. 

According to Adir Ron, Microsoft’s EMEA Cloud & AI Director for Startups and Digital Natives; “Inait is leading a shift towards digital brains capable of actual cognition, moving away from traditional data-based models.”

This new approach allows the AI to learn from real-world interactions, providing a depth of understanding that previous models lacked. 

The companies revealed their partnership aims to enhance Microsoft’s AI offerings, with specific applications in creating advanced trading algorithms and risk management tools for the financial sector and developing more adaptable robots for industrial manufacturing. Inait’s AI models are designed to be less energy-intensive and capable of learning more rapidly than existing systems. 

Henry Markram, Co-Founder of Inait and leader of a 20-year Swiss government-funded brain research initiative, highlighted that the project’s insights are drawn from extensive studies of mammal brains, resulting in 18 million lines of computer code capable of generating accurate biological simulations.

“These simulations are not just about replicating human brains but can extend to other species, potentially revolutionising our approach to AI,” Markram added. 

The technology developed has already spurred interest in neuroscience, with potential applications in understanding neurological conditions like autism through bespoke simulations offered by the Open Brain Institute. 

This marks a significant step forward in AI development, utilising Microsoft’s global platform to scale the innovative solutions pioneered by Inait, with the aim of transformative impacts across various industries. 

FCA Misconduct in London Insurance companies

ESG

Kicking Out Misconduct in London Insurance Market

As reported by Insurance Times, The Financial Conduct Authority (FCA) has uncovered alarming findings regarding misconduct in the London insurance market, revealing that intermediaries within this sector report the highest number of sexual harassment cases compared to other trading industries. The findings have sparked a debate on why the issue is so prevalent in this sector.

One possible reason put forward is the historical culture within the London market, which has long been perceived as a male-dominated environment with traditional, sometimes outdated, workplace dynamics. The long-standing informal networking and socialising over drinks, can contribute to a culture where inappropriate behaviour is overlooked or excused.  

In response, three leading insurance associations, the Lloyd’s Market Association, the International Underwriting Association, and the London and International Insurance Brokers’ Association, have introduced a new joint training programme in collaboration with consultancy firm PADDA Consulting. This initiative is designed to drive meaningful improvements in culture and behaviour across the industry, in line with FCA expectations.

The programme consists of a series of tailored workshops for members of these associations, with additional sessions available for independent Non-Executive Directors and member firms. These sessions focus on key areas such as strategic governance insights, whistleblowing responsibilities, cultural risk oversight, and regulatory accountability under FCA and Lloyd’s governance principles.

This introduction shows a positive introduction by the groups to tackle the cases of harassment within the sector but also reassure the safety of employees across the sector.

The report by FCA shows that around 16% non-financial misconduct cases took place in this sector were sexual harassment. To help improve the workplace culture a number of different workshops have been introduced for HR staff, Compliance Officers, Risk Managers and Senior Leaders to offer additional support.

Industry leaders hope these sessions will lead to real improvements in behaviour and improve the company culture across many different organisations. This action comes as a Lloyd’s broker CEO is being investigated for sexual misconduct, which has led to an investigation which has shown the industry has a high number of reported cases. 

UK Introduces System to Classify Cyber Threats

CYBER

UK Introduces System to Classify Cyber Threats

The Cyber Monitoring Centre (CMC) has recently launched a pioneering system to rate the severity of cyber threats impacting UK organisations. This new framework, the first of its kind globally, assigns cyber incidents a severity level from one (least severe) to five (most severe), providing clarity on the impact of these events. 

The system is led by Ciaran Martin, former CEO of the National Cyber Security Centre, and a committee of leading cybersecurity experts. They use extensive data analysis to assess each incident. Ciaran shared his enthusiasm about the system, stating; “This new standard for evaluating cyber threats is a significant advancement in our ability to manage and mitigate cyber risks effectively.” 

The CMC focuses on significant incidents that could lead to financial losses exceeding £100 million or affect multiple organisations. Following their assessment, the severity level is published along with a comprehensive report detailing the analysis.

These reports are made available for free, aiming to enhance understanding and ability to prepare against cyber threats. 

Will Mayes, CEO of the CMC, highlighted the increased vulnerability due to the reliance on digital technologies in UK firms. He emphasised; “Clarifying the scale of cyber threats helps businesses and individuals fortify their cyber defence and resilience strategies.” 

The centre has also acknowledged the vital contributions from a network of global cybersecurity experts who continue to support and inform the CMC’s ongoing efforts. 

For more information on how the CMC classifies cyber events and the experts behind it, visit the CMC’s official website.

REGULATORY

FCA Proposes Sweeping Redress for Motor Finance Commissions Scandal

In a significant move on March 11th, the Financial Conduct Authority (FCA) has flagged the possibility of an “industry-wide redress scheme” for motor finance, which could see lenders facing liabilities up to £44 billion.

This development echoes the payment protection insurance scandal, highlighting severe industry-wide issues regarding undisclosed commission payments. 

The implementation of the scheme depends on an upcoming decision by the Supreme Court, expected between April 1-3 2025, concerning the obligations of motor finance firms to disclose commission values accurately. This follows a Court of Appeal ruling that has already established potential liabilities for these firms, with the FCA granted permission to intervene. 

The FCA emphasised its commitment to consumer protection, stating; “We want to provide as much certainty as possible to firms, consumers, and stakeholders.”

They further clarified the potential outcomes; “If we conclude motor finance customers have lost out from widespread failings by firms, then it’s likely we will consult on an industry wide redress scheme.” 

Under the proposed scheme, firms would need to determine whether customers were adversely affected by their failures and, if so, provide appropriate compensation. This initiative reflects the regulator’s proactive stance in tackling financial malpractices and aims to restore consumer trust in the motor finance sector. 

Despite the direct financial implications for the motor finance sector, the ripple effects may extend to other areas. The FCA has previously raised concerns about secretive commission payments in sectors such as multi-occupancy building insurance and guaranteed asset protection (Gap) insurance, marking these as enforcement priorities. 

This unfolding scenario highlights a pivotal moment for financial regulation, potentially setting precedents that could reshape industry practices and enhance consumer protections in the UK. 

While finfluencers play a crucial role, they pause a challenge of fraud

FINANCE

The Finfluencer Dilemma: Threat or Opportunity?

While ‘finfluencers’ can play a crucial role in educating younger generations about personal finances, budgeting, investing and general money management strategies, some of them are taking their influence too far which has sparked concern among watchdogs and financial professionals.

According to a study conducted by Royal London, 25% of people between the age of 18 and 34 have referred to social media to educate themselves financially in the last couple of years, followed by word of mouth from relatives and friends.

As tax expert at Royal London Pensions Clare Moffat says; “Many money bloggers and finfluencers use social media channels as a way of sharing information about their personal experience of managing money, and this can resonate with people in a powerful way.”

Finfluencers work best when targeting younger generations on TikTok and Instagram, making a substantially intricate subject much easier to grasp and understand. However, many untrustworthy finfluencers are taking advantage of the situation by promoting misleading and unregulated financial solutions.

This is why the FCA is enforcing more control and scrutiny on finfluencers in order to protect younger consumers. According to FCA Director of Consumer Investments, Lucy Castledine; “We’ve seen a growing number of ads falling short of the guidance we have in place to stop consumer harm.”

Starting March of last year, the FCA set rules for financial ads on social media, ensuring they are clear, honest, and include proper risk warnings designed to protect not mislead younger and vulnerable consumers.

Finfluencers are also impacting the efficacy of traditional financial advisers who see their services usability gradually decrease.

Financial advisers will have to innovate and find ways to stand out, emphasising on their extensive experience and credibility, if they want to catch up to finfluencers who tend to offer free of charge insights and advice on their platforms.

The FCA has halted its plans for introcing a regulated DEI initiative

ESG

Regulatory DEI Plans Stalled as FCA and PRA Opt Out

When it comes to Diversity and Inclusion in regulated financial sectors in particular, there’s still a lot of work to be done.

Back in 2023, the FCA and PRA received multiple suggestions on how to improve diversity and inclusion rules for regulated firms.

However, after receiving extensive feedback and considering upcoming legislation, they decided not to move forward with the plans to avoid adding extra pressure on firms.

The FCA clarifies that it will remain focused on addressing non-financial misconduct to improve market and consumer outcomes while reducing harm.

Non- financial misconduct can encompass anything from sexual and verbal harassment to sexism, racism and other derogatory behaviour within the workplace.

As stated in the FCA consultation document: “We consider that greater levels of diversity and inclusion can improve outcomes for markets and consumers. We have been clear that diversity and inclusion are regulatory concerns and, despite progress, research shows that there is more to be done to improve diversity and inclusion in the financial sector.” 

While a suggested regulatory framework would require insurance firms to document their efforts and strategies towards diversity and inclusion, negative industry feedback and the FCA’s push for reducing red tape led the proposal being dropped for now.

The next steps by the FCA regarding non-financial misconduct will be communicated at the end of June 2025. Until then, the watchdog remains committed to tackling DEI and other issues within insurance.

So what could be the next law around diversity and inclusion? Will the market be able to embrace an inclusive culture without written rules?

CHART assessment

REG UPDATES

REG Launches CHART for better Counterparty Risk Management

REG Technologies has launched CHART (Challenges and risks Tracker)—a powerful new assessment designed to help businesses quickly evaluate and enhance their counterparty risk management and cost efficiency.

In today’s regulatory landscape, businesses face mounting challenges in overseeing their agency relationships and ensuring robust due diligence. With heightened scrutiny from regulators and the rising cost of compliance, having a clear and efficient counterparty risk strategy is more crucial than ever. CHART provides a fast, free, and insightful way to assess the effectiveness of current processes, offering businesses actionable recommendations to strengthen risk oversight, reduce exposure, and drive operational efficiencies.

What Does CHART Do?

CHART is an intuitive online tool that enables businesses to:

  • Assess their existing counterparty risk exposure
  • Identify gaps in oversight, onboarding, and ongoing lifecycle management.
  • Actionable insights to enhance efficiency
  • Receive tailored recommendations from a leading RegTech provider

The assessment takes just a few minutes to complete, with an instant, comprehensive report outlining areas of strength and opportunities for improvement. As a trusted RegTech provider, REG ensures that businesses gain valuable, data-driven insights to stay ahead of regulatory pressures and mitigate third-party risks effectively.

Why CHART Matters

CHART is purpose-built for counterparty risk management, directly addressing the key challenges faced by insurers, MGAs, and brokers. The tool highlights where businesses can optimise their counterparty risk strategies, helping them make informed decisions that safeguard their operations and financial stability.

Managing counterparty risk effectively is crucial—but how well is your current approach working for you? CHART helps businesses answer this question by providing actionable insights to enhance counterparty risk practices and operational and cost efficiency.

“Many firms believe they have control over their counterparty risks, but without benchmarking against best practices, there’s no way to be certain,” said Marketing Manager, Zoë Parsons at REG. “CHART provides that certainty, giving businesses the clarity they need to manage their counterparties more effectively with tailored recommendations specific to individual firm needs.”

Businesses can access the CHART assessment for free. In just a few clicks, they’ll gain actionable insights into their risk position and discover practical steps to enhance efficiency, reduce exposure, and improve compliance.

The role of AI and automation in levelling up the insurance sector

TECHNOLOGY

Harnessing AI for Intelligent Insurance Automation

The insurance industry is experiencing a major shift as sophisticated technology and AI become an essential part of its operations, including regulatory adherence. As reported by Property Casualty 360, this move toward AI-powered automation is still a work in progress but strides have been made in terms of implementation across the sector to streamline processes, cut expenses and provide better service to consumers. 

While the use of advanced tech and AI hasn’t been rolled out fully across the sector, there’s some positive stats showcasing insurers’ progress:

  • 21% of insurers have adopted AI to assist underwriters (Sollers Consulting)
  • 31% of insurers plan to adopt AI in the future  (Sollers Consulting)
  • 56% of insurance firms are investing in RegTech to automate and enhance their compliance processes (REG Technologies)
  • 15% of insurers are already using AI to automatically extract and analyse data for underwriters
  • 78% of insurance carriers leaders and professionals reported that their companies were planning to increase tech spending in 2025 (Digital Insurance)

Turning AI concepts into real-world applications requires strategic planning, choosing the right tools and understanding the company’s structure. Even though some firms have already adopted AI, many are still exploring how to integrate it holistically.

By using AI, insurers can automate complex tasks, reduce manual work, and improve service, with enhances to claims processing, fraud detection, and risk assessment achieved already. In turn, this can lead to cost efficiency and improved customer satisfaction.

  1. Detecting fraud: AI-powered machine learning detects unusual patterns in data to spot potential fraud, helping reduce risks and financial losses. It can also analyse claim documents to identify signs of fraud or unique case factors.
  2. Underwriting: AI helps underwriters assess risk and set prices by analysing large datasets, improving speed and accuracy.
  3. Processing Claims: AI accelerates claims processing by reviewing documents and images, enabling faster settlements and cost reduction. It also automates email classification, data extraction, and claim initiation.
  4. Analysing documents: AI streamlines document analysis by automatically recognising and processing information, boosting efficiency in claims handling.

AI is here to stay, and for businesses to stay competitive, mastering its capabilities and leveraging advanced technology effectively may be the answer for operational success.

UK Cracks Down on Illegal Online Content

REGULATORY

UK Cracks Down on Illegal Online Content

As digital platforms become more and more prevalent, the UK is setting a robust legal framework to combat illegal online activities. Ofcom, the national media watchdog, will enforce new regulations under the Online Safety Act (OSA) to safeguard internet users from illegal and harmful content. 

The move comes after incidents such as the violent mass stabbing in Southport last summer, which is believed to have been partly fuelled by online misinformation. Under the OSA, tech companies have had to complete thorough assessments to understand the likelihood of users encountering illegal content on their services. 

These new regulations cover a wide range of illegal activities, including terrorism, child exploitation, and various types of fraud. Ofcom will begin checking if platforms are complying with these rules and will take action against those that don’t. 

According to Suzanne Cater, Ofcom’s Enforcement Director, “Platforms need to adjust quickly to meet their legal responsibilities. We’re prepared to use the full extent of our powers against anyone who doesn’t comply.” 

The law requires platforms to enhance their moderation processes, improve user reporting mechanisms, and ensure that their algorithms do not promote illegal content. Initially, Ofcom will focus on larger platforms, which have a higher risk of spreading harmful content due to their large user bases. 

Linklaters, a leading British law firm, described this enforcement as “the first big regulatory deadline” under the OSA, with penalties reaching up to £18 million or 10% of qualifying worldwide revenue for non-compliance. Ben Packer, a Partner at Linklaters, noted; “It will become clear soon which companies have taken their responsibilities seriously and which haven’t.” 

This crackdown marks a significant step by the UK government to make the internet a safer space for everyone, ensuring that online platforms are accountable for the content they host. 

FINANCE

BoE and the Fed to Keep Interest Rates Steady as Inflation Risks Persist

Last week, policymakers at both the Bank of England (BoE) and the US Federal Reserve (the Fed) decided to keep federal funds rates steady during their meetings, as inflation remained high in both economies.

The BoE previously stated that inflation was expected to hit 3.7% in the summer before starting to decline.

According to Laith Khalaf, Head of Investment analysis at AJ Bell; “the interest rate committee as a whole will be once bitten twice shy when it comes to watching inflation spiral out of control once again”

Khalaf also reported that; “the macroeconomic situation is volatile as [US President] Donald Trump’s trade policies threaten to unleash a global trade war, which could damage growth and push up inflation”.

Despite Inflation falling from 3% in January to 2.8% in February, Payden & Rygel economists say policymakers want more data before confirming progress, with some viewing Trump’s tariffs as an inflation risk while others focus on growth concerns.

Chief Investment Officer at Federated Hermes, Deborah Cunningham, believes the Fed will lower interest rates once or twice by the end of the year, though not before May, which is a change from earlier expectations due to persistent inflation and strong consumer demand.

Meanwhile, Payden & Rygel economists see a recession as unlikely since wages continue to rise, but if economic growth slows more than expected, the Fed may cut rates more aggressively in 2025.

Since the BoE’s rate cut in February, Trump’s unpredictable tariff announcements have shaken financial markets and raised global inflation concerns.

Not to mention that US stocks have fallen sharply, losing over $5 trillion in value amid recession fears, Reuters reports.

The role public information plays in the insurance sector and the dangers that a lack of data can pose for policyholders

ESG

Why Public Data Matters in Insurance?

The insurance industry thrives on a constant flow of public data to assess risk, set prices, and protect itself from massive losses. But disappearing public data is putting a huge strain on the sector.  

As reported by Property Casualty 360, issues in datasets resulted from recent reduction in governmental workforce, agency shutdowns and the recently established Department of Governmental Efficiency (DOGE) in the United States.

These changes risk contributing to inaccurate underwriting, escalating claim costs and unavoidable higher insurance premiums.

These changes will not only be impacting insurance professionals, but everyone else including policyholders and service providers.

Some examples of data that insurers refer to when assessing risk include flood maps, infrastructure conditions reports and historical wildfire and flood statistics. However this data will become scarce and potentially inaccessible without the necessary resources to maintain databases that contain this information.

Moreover, Associated Press reported that the Department of Justice revoked access to important crime data that provided precise analysis of crime trends by state.

According to PropertyCasualty360, below are five categories of data that are highly at risk:

  1. Climate change projections: Climate data is a crucial asset for insurers to predict climate disasters and underwrite different types of policies, including life insurance.
  2. Health data: This type of data helps life insurers spot health and mortality trends to assess risks for future policyholders. Recently, the Centers for Disease Control and Prevention deleted over 3000+ pages from its website covering important medical research, which can hinder risk modelling.
  3. Infrastructure state: Government data on infrastructure conditions inform insurers of any potential dangers which can shape their underwriting capacities further.
  4. Traffic accident reports: Most insurers rely on governmental road accident and crash data to fix and tweak premium rates. According to MarketWatch, a cut in transportation data might leave insurance companies stranded.
  5. Demographic and socioeconomic data: Population, income and socioeconomic reports shape insurers’ pricing models. Without them, insurers would struggle to assess long-term risks.

Without accurate data, insurers face uncertainty, leading to higher premiums as they take a more cautious approach.

More claims may be denied, and policies cancelled as insurers struggle to assess risks properly. In some cases, entire areas could become “insurance deserts” where coverage is unavailable due to unreliable data and unpredictable risks.

As insurance strives on data, it will have to find alternative sources of reliable data to assess risks successfully and keep providing value to policyholders. But what would this data be? And how expensive will it become for both insurance companies and customers?

ESG

Natural Resources Companies Face Challenges with Excessive Insurance Inclusions

A recent survey has revealed that more than half (53%) of companies operating in the natural resources sector are struggling with insurance due to “blanket or excessive” exclusions, as reported by Insurance Post. These exclusions are seen as a significant barrier to transferring clean energy risks to the insurance market.

The survey gathered responses from 450 senior decision-makers across various industries, including renewable energy, oil and gas, chemicals, mining, metals, power, and utilities.

Many businesses felt that insurance providers need to do more to support the clean energy transition. Around 39% of companies also said the cost and availability of insurance are big challenges.

Other issues included the likes of the short duration or inflexibility of insurance (48%) and a lack of suitable insurance products (47%). Companies also want a longer-term cover, but insurers focus on the yearly policies creates major uncertainty.

Additional difficulties come from strict risk engineering rules (46%), high costs (39%), insurers’ low appetite for risk (35%), and limited capacity (28%).

Some believe that insurers are overly cautious because they don’t fully understand clean energy risks yet. This suggests the delayed action taken by insurers. 

Marie Reiter, Global Head of Broking Strategy for natural resources at WTW, pointed out that insurers are increasingly aware of these challenges and have been working on different innovative products such as performance insurance. However, she has noted that the availability of suitable insurance products is still at the level that businesses within the clean energy industry would like to see therefore suggesting more improvements would be necessary.

Overall, while there is a growing recognition of the need for more tailored solutions, businesses in the natural resources sector continue to face difficulties in securing adequate coverage for their clean energy products. 

It is said to be believed that insurers and underwriters are being encouraged to develop a deeper understanding of the different types of materials and technical risks involved, which would ideally help bridge the gap between the availability and needs. 

UK Government Intensifies Scrutiny on Civil Service Spending

FINANCE

UK Government Intensifies Scrutiny on Civil Service Spending

In a move to combat financial waste, the UK government is set to cancel approximately half of the existing 20,000 government procurement cards. This decision comes as part of a broader initiative to enhance state efficiency and redirect funds towards crucial public services. The current review was sparked by an alarming increase in spending, with figures soaring from £155 million in the fiscal year 2020-21 to £675 million in 2024-25. 

Introduced in 1997, these procurement cards were initially distributed to facilitate the acquisition of essential goods and services for various Whitehall departments and agencies. However, recent scrutiny has uncovered extravagant expenditures, including lavish meals at exclusive clubs, high-end crystal purchases, and luxury items from Fortnum & Mason. 

Chancellor of the Duchy of Lancaster, Pat McFadden, highlighted the need for stricter controls following revelations of these expenses. Notably, the Foreign, Commonwealth and Development Office (FCDO) came under fire for questionable purchases such as £2,479 on DJ equipment for a British embassy event in Doha. 

Moving forward, officials will need to justify the necessity of retaining their procurement cards, with expectations to slash the number significantly. The government is also tightening regulations on card usage. Limits on hospitality spending will see a drastic reduction from £2,500 to £500, with any higher amounts requiring approval from a Director-General. 

Additionally, the new policy will restrict purchases to essential items not covered by existing departmental procurement channels, aiming to ensure more cost-effective spending. Officials found misusing these taxpayer-funded cards may face disciplinary actions. This initiative is part of the government’s broader strategy to ensure fiscal responsibility and eliminate unnecessary expenditures within the public sector. 

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