The Treasury select sub-committee last week described the Money Advice Service as “not fit for purpose” and in need of a “radical overhaul” as part of a damning inquiry into the future of the service.
On 3 December the Treasury select sub-committee published its report into the effectiveness of MAS following a year-long inquiry.
MPs say they considered recommending MAS be scrapped completely, but have granted it a “stay of execution” until the findings of a Government review into the MAS’ objectives are published.
Sub-committee chairman and Labour MP George Mudie says: “The MAS is not currently fit for purpose. It is far from clear it has adopted the right strategy or even that it is performing the correct role.
“In finalising this report, the committee considered carefully whether to recommend the MAS be scrapped completely.
“Given the Treasury had already announced its intention to conduct a review of the MAS, we were persuaded to grant a stay of execution.”
MAS chief executive Caroline Rookes responded that the Treasury committee’s findings were largely based on evidence taken well over a year ago.
She says: “Since then, we have, with the FCA, appointed a new chairman and chief executive, and changed the direction of the organisation to focus much more on working with partners to help customers. What is more, we have already done much of what the committee recommends.”
Meanwhile on 5 December last week the National Audit Office published a report stating the service is not delivering value for money and calling for it to work more closely with IFAs.
The NAO report, Helping consumers to manage their money, argued that while the debt advice part of the service is delivering value for money, the money advice service part is not.
acknowledges the MAS has been moving in the right direction on money advice since new chief executive Caroline Rookes took over in February, but that it must become more of an “influencer” in the sector.
Visits to the website increased by 400 per cent following an £18m marketing campaign. But the NAO says it is not clear the website is directing those who need more assistance towards phone or face-to-face channels.
The report makes a series of recommendations for the MAS to improve including the need to build relationships and links with regulated advisers to signpost users who want regulated products.
In response to the NAO report, Rookes said improvements had been made but that it was not complacent.
She says: ”We are working hard to develop meaningful relationships with the advice community and to enhance the way we evaluate our progress, but there is more we can do.”