The Government has come under fire for failing to act following a damning report into the Money Advice Service.
The Farnish report, published earlier today, called for the budget of the body to be slashed, alongside a dramatic restructure.
MAS has responded by promising to evaluate the report before going back to the Government in the Autumn. The Government will then publish its own findings by the end of the year.
A source close to the report describes the plans as “frustrating”.
The source says: “It’s like asking a schoolchild to mark their own homework. That is what the Government is doing here. The chances of MAS being able to mark an impartial and objective assessment of itself are pretty slim. It’s appalling that the Government is now handing the ball back to MAS.”
Apfa director general Chris Hannant says: “The Government has been sitting on the report for the best part of six months, surely it can make up its mind on what it thinks is right or not?
“Why can’t the Government either accept it or reject it? Why does it need MAS to say what it thinks?
“I was caught speeding the other week, and no-one asks me whether I thought it was fair or right, I was just told to pay the fine or take a course.”
Treasury Select Committee chairman Andrew Tyrie adds that while the Farnish report is welcome, the government has still failed to enquire whether MAS should be abolished all together.
“Christine Farnish – the independent reviewer -shares the Committee’s concerns about the high spending by MAS on its website and marketing. She has also expressed concern about the extent to which the MAS may be duplicating the work of private and voluntary sector providers. On the latter, she concludes that the budget for the MAS’s consumer finance education role could be halved,” Tyrie says.
“However, the crucial question of the MAS’s future as a statutory body was excluded from the reviewer’s terms of reference. MAS have now been asked to respond to Ms Farnish’s report in the autumn. When the Government considers that response, it should also consider the MAS’s future as a statutory body.”
Essential IFA founder Peter Herd says the MAS should now focus on financial education and signposting users to regulated financial advice.
He adds: “I think that MAS needs to work with the regulator and with the Government to establish what needs to be done to fill the advice gap.
“We all want to expand but we are not given the support because we are being undermined by this free ‘advice’, when we have regulation that says there is no such thing as free financial advice.”