FSCS has published a paper consulting on its approach to calculating the expected compensation costs over periods of three years. The new FSCS funding arrangements allow it to raise a levy amounting to a third of those costs. FSCS clarifies that the new power increases certainty for the industry, and that it shouldn't be seen as a move to a pre-funded model. Expected compensation levels will be based on past experience, adjusted to reflect new trends and "one off" situations. Any surplus at the end of a year will be offset against expected costs for the following three years. FSCS has also published a more general paper on its approach to funding and borrowing. (Source: FSCS Funding Policy Update)