Oral question asked in the House of Lords, by Lord Trimble (Conservative). It was answered on Wednesday, 26 November 2008.

Banking: Northern Rock

Question: My Lords, there are rumours to the effect that in the region of £4 million has been paid to accountants for the valuation of the assets of Northern Rock, plus a further sum with regard to Granite, and total audit fees of £12 million. Are these figures correct? If they are, what was done in terms of tendering for this contract and could it not have been done more cheaply?

Answer: My Lords, I believe that the payment to BDO Stoy Hayward in respect of any compensation that might be due to the shareholders of Northern Rock was part of a public tender exercise and was agreed at a fixed fee of £4.5 million. I am not sure whether all or any part of that has yet been paid. Other fees that have been incurred by Northern Rock are a matter for Northern Rock to report on and I am afraid that I am not in a position to give a helpful answer about the quantum. However, from our perspective, we will certainly ensure that we seek value for money in every aspect of government’s involvement in this, as we do in all aspects of government policy.

Secondary information