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Govt axes £12.5m grant for consumer education body

The Consumer Financial Education Body has had £12.5m worth of Government funding slashed from its budget.

According to the Cfeb 2010/11 business plan, the coalition Government has cut the proposed Treasury grant, worth £12.5m, preferring that the body is funded completely by the industry.

It states: “When Cfeb was created in April 2010, our budget had been approved by the FSA as £45.4m – £32.9m of this was to come from FSA firms via the levy and a further £12.5m was to be received in the form of a grant from the Treasury.

“Following the change of government in May, the coalition Government put in place their stated policy that, while supportive of our work, they believed our funding should come completely from the industry. As a result, we did not receive a grant from the Treasury.”

In June the coalition announced in its emergency Budget that it would introduce a national financial advice service, in place of Money Guidance, in Spring 2011. Money Guidance was initially due to launch in 2010/11.

The Budget states: “The Government has asked the Consumer Financial Education Body to develop a new annual family financial healthcheck. This will be introduced in spring 2011 as part of the national financial advice service.”

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Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. Steven Farrall (Adviser Alliance) 3rd November 2010 at 4:49 pm

    No ‘consumer’ I have ever met has ever heard of this outfit. When I have told them about it they’ve said ‘Well, that’s an utter waste of my money* as I’d just come and ask you’. In otherw ords they, the ‘consumer’ don’t trust the gummint (i.e. the FSA)

    * Economies consist of people and things. Governments (i.e. the FSA) and companies are just convenient admin fictions by which we better organise our lives. In other words it’s the client’s money that passes through our accounts and onto the FSA as ‘our’ fees for this shower.

    Just shut it down. Now.

  2. Good, Hopefully another quango bites the dust

  3. I disagree totally with the idea of the CFEB ~ a government initiative ~ being funded by the industry and I am therefore totally against being forced to contribute to its cost. We now learn that this cost is going to be £12.5m more than it was to begin with and, given the FSA’s track record on Cost:Benefit Analyses, doubtless this cost will escalate further and further into the stratosphere.

    It would be much better and more cost effective to create an A Level course to cover this sort of thing and to make it available also as an adult learning course for those prepared to pay something towards it.

    The FSA levies go up and up every year. The FSCS levies go up and up every year (with the addition of large one-off extra levies from time to time because the FSA can’t tell the difference between a provider and an intermediary). The cost of the FOS goes up and up every year. And, on top of all that, the cost of the CFEB is going up before the bloody thing’s even been launched.

    There is a way out. But if you don’t mind being bled white to fund all this rubbish, then by all means stay with the FSA.

  4. The quality of the ‘education’ is that the comparison tables still allow you to to compare pensions with an NRD of 50 up to 65. The first has not been possible for over six months now, the latter is below the state pension age for many. Then on the home page the top of the list on the ‘Need to know section’ is How to Complain about your Pension, lower down comes things like Risk and Reward and Tax Relief – sums it all up really – complaining would seem to be more important than trying to find out how the thing works…

  5. Do solicitors pay towards the “free” Legal Aid bill which costs £ billions and I gather the most expensive in the world?

    Does any other professional organisation offer a ” free” advice service that is not funded by the tax-payer but funded by those who provide the advice?

    Is this really progress?

    Surely the whole object of the exercise is to make it easier and simpler for anyone to get financial advice yet it does seem that with this and RDR will be the exact opposite for many.

    The fact the Government thinks we have to pay for and provide a “free” service does rather indicate they believe advice is “resticted” yet they and the FSA are the ones creating the “restriction”.

    Lunacy if you ask me but maybe I need to book myself into the asylum soon as either I am going nuts or everyone else is.

  6. If the Government can withdraw it’s funding then why can’t we do the same or are we not entitled to be treated “fairly and responsibly etc.”?

    One wonders how many more will be able to keep paying for all these extra costs we are being “forced” to pay. Only the Banks and Product providers will be able to afford to do so.

  7. The government is almost bankrupt so they can withdraw funding.

    The industry is crumbling due in part to a recession but mainly regulation but has to pay???

    It is very clear that there is no respect for the industry which funds these people’s existence, they think it is a bottomless piggy bank to be raided.

    If their regulation included maintaining a profitable and healthy organisation they would have the money to play with.

    Words cannot describe the stupidity of these people who dig beneath their own feet then wonder why they topple.

  8. If the Treasury has withdrawn funding so should the industry, can we all write to the FSA and let them know we also withdraw funding with IMMEIDIATE EFFECT!
    ;0)

  9. Another tax – but this time not spread across all consumers – and we were not asked to vote on it ! – When are these people going to stop putting their hands in our pockets without even asking us if its reasonable to do so. We are warned to beware of such people by police and other organizations – strange form of morality when my MP told me that the Government fully support this initiative, except it seems when putting other taxpayers money into it. If this was a charity we might have some choice as to whether we donate.

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