The Financial Conduct Authority wants the Money Advice Service to undergo a value for money study for its annual business plan, above and beyond the current FSA review.
Speaking to the Treasury select committee this week, FCA chairman John Griffith-Jones said it is having “robust” discussions with MAS over its budget for 2013/14.
He said: “We are, frankly, having a robust exchange of views about what they want to spend the money on, whether it is the right things.
“What we really need, and which we have the powers for, is a value for money study. It is one thing for us to review the business plan but if I do not like it and the chairman of MAS does like it then it rests uncomfortably in no mans’ land.
“I am fully aware about many people asking why MAS spends so much on its marketing budget.”
When asked if the FCA has any powers to change or veto the MAS business plan if it is not satisfactory, Griffith-Jones said his powers are not clear.
The FSA minutes from its annual meeting in April, published last month, show there was board level concern over MAS’ business plan last year.
Informed Choice managing director Martin Bamford says: “We are fearful that the FCA does not really have the mandate to do anything about this. It is quite unlikely that any organisation like the MAS would ever see its budget reduced. Even if its budget is maintained however, at least it can be spent on worthwhile causes rather than vanity advertising.”