YORK credit card insurer CPP has revealed it faces difficulties in recruiting staff and rewarding managers as it works to rebuild the business.

The Holgate-based firm, which employs 550 people in York, has revealed in its annual report that the business has been constrained by an inability to recruit high-quality permanent staff .

CPP says it is thus “heavily reliant on expensive interim contractors” as it struggles to attract workers following its mis-selling scandal, which saw it fined a record £10.5 million by the Financial Conduct Authority in November 2012.

The report also reveals that CPP’s current financial position, with operating losses exceeding £30m, means it is unable to provide incentives to boost the recently appointed senior management team, with a “relatively small” number of shares available to offer as long-term incentives.

CPP said no bonus payments were made in 2013.

In the annual report, CPP’s remuneration committee said it recognises the need to incentivise the new management team to focus them on the recovery agenda.

However, in the company’s remuneration policy for the current financial year, executive salaries have not risen, with chief executive Brent Escott’s base salary set at £325,000, while chief financial officer Craig Parsons will receive £180,000.

Mr Escott and Mr Parsons replaced Paul Stobart and Shaun Parker who received £148,000 and £52,000 in lieu of notice respectively when they left last August.

In its full year results, announced last week, CPP revealed a fall in revenue during 2013 to £178m compared to £269.9m the previous year.

Operating losses of £17.2m in 2012 became losses of £32.9m in 2013, while the firm saw renewal rates drop 4.1 per cent to 69.4 per cent with its policy base falling to 7.1 million, two million less than 2012.

A total of £16.5m has been paid out to customers hit by mis-selling, with an extra £4m set aside for the redress scheme, bringing the total to £69.8m.