Mark Hoban's letter of dismay over Money Advice Service cuts
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Treasury financial secretary Mark Hoban has written to the Money Advice Service over concerns it may drop its work on financial education for young people, Money Marketing understands.
Last week, Money Marketing revealed MAS was making swingeing cuts to staff numbers. It is understood over three-quarters of the 150 staff have been put on consultation, including its team focusing on young people. This follows a review of its products, services and delivery channels.
In July, Hoban gave MAS the task to review provision of financial education in schools and for young people. Money Marketing understands Hoban has written to MAS to voice his concern that this work will be scrapped.
An MAS spokeswoman refuses to comment on the letter, but says: “We intend to undertake a research project to consolidate our understanding of all the existing evidence covering the impact of educational practice and to map the wide range of initiatives that are funded by the financial services industry.”
It is understood all MAS roles other than senior management and central operational jobs could be scrapped. A source close to the organisation says MAS plans to recruit 50 new staff with social media and digital skills next year to focus on the website and scrap its phone and face-to-face service. The spokeswoman denies these services will be cut.
MAS was launched in April and is funded by a statutory industry levy. It has a budget of £43.7m for 2011/12, which includes £13.5m for staff costs. It has spent over £2m on delivery of its online healthcheck and £4m on an ad campaign.
Yellowtail Financial Planning managing director Dennis Hall says: “MAS would have a greater mass-market appeal online and cost the industry less to fund.”
An e-petition, started by Moneysavingexpert.com founder Martin Lewis, calling for financial education to be compulsory in schools has reached 100,000 signatures which could trigger a Parliamentary debate. The All Party Parliamentary Group on financial education for young people has 225 MP members.
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Readers' comments (30)
Chippy Minton | 10 Nov 2011 9:55 am
Unfortunately Mr Hoban, when you ruin the businesses of the people who fund you with your stupid regulatory schemes you run out of money to fund your vanity projects.
Maybe the new MAS services that you desire so much could be funded by a levy on the salaries of MP's?
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John Hutton | 10 Nov 2011 9:59 am
It is interesting that there were once 5 key objectives which the FSA stood for of which one was to "promote financial education to the general public". This objectives was dropped some time ago.
Now it would appear MAS are going to do the same so we are absolutely no further forward for something which must be considered as vital post RDR.
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Stuart Gregory | 10 Nov 2011 10:05 am
Well I hope that Mr Hoban receives a response - a courtesy he hasn't afforded me since I wrote to him in October 2010 regarding the Mortgage Market Review.
My local MP, Julian Lewis sent me a response to my correspondence about MMR within 48 hours - informing me that he had forwarded my concerns to Mr Hoban for a response.
Still waiting....
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huw | 10 Nov 2011 10:06 am
So now we are up to 75% of staff on consultation and rising. Who can I write to the express my 'dismay over Mark Hoban'....? Next we will be told that the Govt have decided to levy us £100 million to prop up the service. In principle I support the MAS but it has obviously suffered a collision with the real world, a place Mr Hoban will not be coming to any time soon.
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Andy | 10 Nov 2011 10:16 am
70% of mortgage brokers have de-authorised in the past 3 years, if 30 to 40% of IFA's leave as a result of RDR then there will be another dramatic cut in funding from these firms leaving the remainder to pick up the Tab for these Vanity projects, or a little reality might creep in, as to where the regulators income will be comming from..........apart from more frequent and larger fines (which the FSA should not be allowed to keep on principle)
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Tim Purdon | 10 Nov 2011 10:19 am
Sometime ago when talking to a teacher friend I asked why IFAs were not giving financial education lessons in schools in Scotland. She replied "you are not a teacher". The term "closed shop" came to mind. Has anyone dealt with teachers on financial issues. The individuals I have dealt with appeared somewhat removed from reality and seemed to expect because they were teachers to have enough money to meet all of their desires. It seems a pity the system does not recognize that the experts on a subject should be teaching that subject.
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Fergus Macpherson | 10 Nov 2011 10:20 am
When I listen to early mumblings, with the MAS being a classic example, I often know instinctively and very quickly, that this is something which will simply not work. I am neither a cynic, not am I a pessimist, but one simply knows that the MAS will be a 'damp squib'. To assume that we will all simply log on to a web-site to have all our financial queries solved, without cost, is just silly. RDR will of course happen now. And there are some good points. But it is inconceivable that it will lead to more people receiving advice. It will make no difference to those who are of high net worth, for they will be used to a fee structure. But it will be a barrier to those who are less inclined to pay fees. Really, there is no point my banging on about this any more. The 'proof of the pudding' will be in 3 or 4 years' time when it becomes patently clear that no-one is being encouraged to save reguarly into their pension or ISA, quite simply because we, the IFAs, will not be paid to push it. Stupid, stupid, stupid people at the top of the regualatory tree.
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Anonymous | 10 Nov 2011 10:25 am
It is hard to have any sympathy whatsoever for the FSA's 'poodle'...Mark Hoban...he feels me with dismay at the contemptuous way he seems determined to destroy the livelihoods of thousands of advisers. He has, like the FSA, no concept of accountability...you only need to read comments here to see that we wish he would depart the scene...
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John Phillips | 10 Nov 2011 10:26 am
Why did the people setting up MAS feel the need to offer a £349,341.00 salary to the highest paid director? Can you imagine the pension contributions required to fund the pension rights when they fall on their sword in a few years time due to its failure? Will we ever see value for money out of these financial services quango’s?
I still find it funny when the spell checker offers up “ guano’s” for quango’s do you think my computer is trying to tell me something?
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Anonymous | 10 Nov 2011 10:37 am
If we pay for it via our levies, shouldn't we have some sort of say in what happens?
it would be interesting to know how many IFA's earn £350,000. i bet most are more like £35,000.
Why not have this type of function fall under an organization such as AIFA or similar?
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