PwC awarded £16.5m contract to manage Northern Rock remaining assets
PwC has been awarded a contract worth £16.5m to manage the government’s remaining assets in Northern Rock.
It comes 12 years after the accountancy firm was criticised for being complacent in its audits of the failed lender, which collapsed in 2007.
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PwC will now take control of UK Asset Resolution (UKAR) according to a government contract notice.
The Treasury took over UKAR, a bank set up to sell Northern Rock and Bradford & Bingley assets, following the financial crisis.
However, PwC came under fire for failing to highlight the risk involved in Northern Rock’s business model, which saw it require rescuing from the state.
It was also accused of a conflict of interest as helped Northern Rock sell off its mortgage assets at the same time it was responsible for checking its books.
The Big Four accountancy firm will be paid £16.5m to manage UKAR until 2030, but the holding company will remain in government ownership, according to a UKAR spokesman.
“We launched a transaction aimed at selling the legal entities of Northern Rock and Bradford & Bingley, along with their remaining assets, which would allow us to complete our objective and dispose of the government’s investment in these businesses,” a spokesman told Morning Wire
“Using the Official Journal of the EU (OJEU) process, we have agreed to outsource this work to PwC once UKAR has completed its objective.”
UKAR initially managed more than £100bn worth of assets from the failed lenders, but by April this year had reduced its balance sheet to £8bn after a string of asset sales.
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It has also repaid the £48.7bn of state loans it used to fund the bailouts.
PwC declined to comment.