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£13M staff costs for MAS

The Money Advice Service plans to spend over £13m on staff costs and more than £2m on its online healthcheck service this year.
Last week, the FSA published its policy statement on regulatory fees for 2011/12.

The MAS, which launched in April, has a £43.7m budget for the year, which is funded by a statutory levy on the financial services industry.

A breakdown of the budget shows the MAS has allocated £13.5m for staff and associated costs and a further £9.7m for the delivery of face-to-face, phone and print advice. The delivery of online advice is costed at £3.4m.

The online healthcheck service, which will provide a personal financial action plan, is budgeted at £2.1m.

The Consumer Financial Education Body, which preceded the MAS, had a total budget of £32.9m for 2010/11.

The MAS was unavailable for comment.

The FSA’s policy statement also confirms the regulator’s annual budget for 2011/12 is £500.5m, an increase of 10 per cent on the £454.7m budget for 2010/11.

Feedback from earlier fees consultations, published in last week’s paper, shows three respondents raised concerns over the rise in the FSA’s budget and the “continued spiralling of indirect costs” from initiatives such as the mortgage market review and the RDR. But the FSA insists £500m is needed to meet its objectives for the year.

It says: “We accept there are indirect costs of regulation apart from costs recovered through fees. These indirect costs will inevitably arise from our interventions in financial markets, such as through the MMR and RDR. These costs are considered relative to the benefits of such interventions.”

Evolve Financial Planning director Jason Witcombe says: “Advisers have to hope that the FSA has decent control over its costs. The answer to a problem should not always be to throw more money at it.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Julian Stevens 3rd June 2011 at 10:03 am

    Lack of accountability again. And anyway, the MAS is just a subsidiary part of the FSA. It used to be the department which produced those (very good) Money Guidance booklets so why, now its activities have been extended to taking a few phone calls, is it subject to a separate budgetary allocation of almost £44m, with yet more levies? The FSA is just a money-guzzling leviathan and has not the slightest intention of moderating its appetite. Has there been any Cost:Benefit Analysis of the MAS? Not that it’d make any difference if there had been, because the FSA would simply ignore any challenges to it. We think it’s a good idea, so just pay up or pack up. Ain’t life grand?

  2. MAS should be funded by the taxpayer. As the FSA likes to keep reminding everyone, advice is NOT free so those who want to avail themselves of this service should pay for it.
    If the budget for MAS is £454.7M.00 for 2010/2011
    You can guarantee that this will double in the next year or so.
    We already pay taxes/ fees/fscs/fos/PI/compliance, etc etc. This is just another tax on business. They could put the mafia to shame.
    While small business owners will have to tell staff they cannot have a rise, MAS will be paying out mega buck salaries and bonus pots. Quango Quango Quango.

  3. The MAS has a number of potential revenue streams, as highlighted on its website.

    Thus far they have trod the proven path of using adviser funds as we are a soft touch and the funds can be legally stolen without any recourse.

    That the MAS has effectively set up in opposition to advisers is yet another slap in the face from the regulator that doesn’t give a stuff.

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