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The government spending watchdog has criticised the Bank of England over its spending and excessive desk numbers.

The National Audit Office found that Bank staff spent £5m without following proper procedures and had 800 empty desks at Threadneedle Street.

The NAO said there were 200 purchases above £25,000 that were made without checking with the appropriate office.

The Bank acknowledged that some systems and processes needed to be modernised.

However, it defended the number of empty desks.

The NAO said said the Bank would need to "transform" the way it operates its central services division, which handles budgets for buildings, human resources and technology support if it was to meet its self-imposed cap of £476m in annual running costs.

The spending watchdog said savings of up to £200,000 could have been made on £2m these purchases.

It said that most of the unchecked purchases made without consulting the central procurement team were related to IT costs.

The NAO did acknowledge that the Bank had since overhauled its procurement operation and was taking follow-up action with employees in cases of poor compliance.

Culture

Amyas Morse, the head of the NAO, said: "The Bank of England has rightly recognised that its central services need reform and has started to take action.

"However, the Bank should not underestimate the scale of change required. Improvements will only be possible if staff across the Bank are encouraged to embrace a more cost-conscious culture."

Managing the Bank of England Central Services report

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The Bank defended itself in a statement.

With the sort of precision one might expect from the UK's central bank, it said it had 1.04 desks per staff member and 400 of the desks empty on a daily basis - about 10% of the total - could be accounted for by staff leave.

The Bank said it had managed to keep its controllable costs with the targeted budget this year, at £474m, despite extra costs relating to Brexit.

Joanna Place, the Bank's chief operating officer, said: "As a result of a great deal of hard work and commitment from colleagues, we have held our budget flat for the current financial year and aim to do so in the medium-term.

"This is despite the additional demands placed on us as a result of the UK preparing to leave the European Union."