Financial Conduct Authority wastes £3.2m on Oracle licences it did not need

FCA thought it was getting a bargain but then realised it didn't need all the licences it had bought

The Financial Conduct Authority (FCA) has admitted that it wasted £3.2m on Oracle software licences that it did not need.

The organisation supervises the conduct of all regulated financial firms, and the prudential supervision of those not supervised by the Prudential Regulatory Authority (PRA).

In an embarrassing revelation, the FCA explained that it bought Oracle licences at a discount price, only to realise that it didn't need all of them.

"In May 2014, the FCA entered into a one-year contract to purchase a number of software licences," the FCA said in its financial accounts for the year.

"The contract involved the FCA making a prepayment in order to secure the licences at a significant discount to the list price. Utilisation of these licences by the FCA has not materialised as originally anticipated and thus £3.2m of the prepayment has been written off as a constructive loss. The contract expired in May 2015 and is not being renewed."

The FCA is not funded by the UK government. Instead, firms who are regulated by the FCA pay a fee to the organisation, and that is then used by the FCA to deliver its objectives.

In response to a Freedom of Information Act inquiry, the FCA said:

"The value of the licences that the FCA estimated it would require during this one-year deal proved to be incorrect for three key reasons; the assumptions underpinning the agreement did not anticipate that some projects that originally required Oracle licences would be de-prioritised by the FCA thus reducing demand; some projects would be implemented later than anticipated and hence fell outside of the agreement's one-year timeframe; and some projects would adopt an alternative technical solution."

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