The Government-backed Money Advice Service, which is supposed to help those in
debt and to improve consumers' finances generally, is “not fit for purpose”, MPs
have said.
They criticised the service for its marketing spend and
“excessive” wages and said its resources should have been focused on helping
those in crisis during the recession.
Its first chief executive, Tony
Hobman, was forced to defend his £350,000 salary in Parliament in 2011. He
stepped down and was replaced by Caroline Rookes in February, who earns a base
salary of £140,000.
Two staff still earn more than Ms Rookes - strategy
and innovation director Mark Fiander and marketing and service delivery director
Karen Broughton - who both earn a base salary of £160,000. If "other emoluments"
and pensions are included, three staff earned in excess of £200,000 for the year
ending March 2013, as the organisation's report and accounts show,
above.
The MPs' criticism emerged in a report published by a Treasury
Select sub-committee following a year-long investigation into the organisation.
It called for a “radical overhaul” of the Money Advice Service, claiming it has
failed to adopt the right strategy or perform the correct role.
The
sub-committee said it considered calling for the service to be scrapped
completely, but was persuaded to grant a "stay of execution" given the
Treasury's intervention. It has committed to reviewing the service by
2015.
George Mudie, Labour MP and chairman of the sub-committee, said:
“People up and down the country, particularly at this time, need access to high
quality money and debt advice. If this is to continue to be facilitated by a
public body, a radical overhaul is needed.”
The Money Advice Service was
created in April 2010 and was originally called the Consumer Financial Education
Body. The body, which is industry funded and provides online, telephone and
face-to-face advice, was widely criticised in 2011 when it spent over £250,000
rebranding its website and £4m on an ad campaign.
The service made almost
half its staff redundant at the end of 2011 and start of 2012 after a review of
its products, services and delivery channels.
The body’s statutory
objectives are to enhance the public's understanding and knowledge of financial
matters and help people manage their own financial affairs. In April 2012 it
took on additional responsibility for funding and improving the quality,
consistency and availability of debt advice. The service is not able to provide
regulated financial advice but offers generic information to
customers.
The sub-committee said the service failed to effectively
consult and build relationships with existing organisations, which meant it
duplicated what was already being provided in the private and charitable
sectors.
Ms Rookes said the Committee’s findings are largely based on
evidence taken over a year ago.
"Since then, we have, with the Financial
Conduct Authority, 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," she said.
Telegraph
