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Lord Kirkwood: The MAS is underfunded and risks being ‘swamped’

London UK Thames Parliament 480

Liberal Democrat peer Lord Archy Kirkwood says the Money Advice Service is underfunded and risks being “swamped” with enquiries over the next five years.

The MAS has a total budget of £80.8m for 2012/13. Some £46.3m of this will be spent on delivering “money advice” and will be paid for through an FSA levy on the financial services industry.

The remaining £34.5m will spent on debt advice, reflecting the Government’s decision to move responsibility for debt advice to the MAS.

Speaking at a debate on small pension funds in the House of Lords earlier this week, Lord Kirkwood said : “I am worried about the Money Advice Service. Since April it has had responsibility for debt counselling across the United Kingdom.

“It has a budget of £80m. That sounds like a lot of money but when universal credit comes into being over the next five years or so I think that it will be swamped.

“The point I am making is that if the FSA levy produces £80m it will need to be monitored quite carefully. The Money Advice Service is now in a crucially important position to help people with Omo questions and decumulation issues as they approach retirement; it is an essential co-part of its work.

“I do not think it is properly resourced at the moment for the future demands that will be placed on it.”

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Comments

There are 42 comments at the moment, we would love to hear your opinion too.

  1. Well that cheered me this morning!

  2. here we go, some Lord who obviously does not have a notion, spouts on about upping the MAS budget so i guess i’m going to have to get the cheque book out AGAIN.

  3. Dont worry Lord Kirkwood MAS will stay underfunded as there will not be enough members of the finacial services to pay for it after RDR

  4. If the politicians are so concerned about funding and want to go into the advice business why don’t they fund MAS from tax revenue and scrap the FSA levy.
    If they do that they get control of the budget and the responsibility for making sure the money is spent in a sensible manner.
    On the other hand they would also be responsible for it’s errors and inefficiencies

  5. Me thinks His Lordship requires another lobotomy! How can he possible say this – as usual these guys are spouting complete drivel!

    Still, he’s collecting his expenses for spouting tosh. Great job if you can get it!

    Hey ho…….

  6. Oh FFS.

    Why is this world populated with fools?

  7. Lord Kirkwood …. You pay for The allegedly corrupt A4e to give advise (Which MAS say isn’t advise)
    Common purpose at work again!!

  8. Yet another clown!

  9. Remind me how the Lib Dems did in yesterdays byelections?

    I believe they lost their deposits in 2 out of the 3 seats in which they stood.

    I’m not sure we will need to take the views of senior Lib Dems particularly seriously in future. They are ceasing to have a public mandate.

  10. Nicholas Pleasure 30th November 2012 at 10:29 am

    @ JOHN | 30 Nov 2012 10:20 am

    Has he already had one lobotomy then?

  11. I think Lord Kirkwood may say “I’d rather have a bottle in front of me than a frontal lobotomy”

    I agree, oh FFS, more lunatics taking over the asylum!

    More poorly thought through Government decisions to appease the masses causing havoc elsewhere.

  12. Given all the clap trap we have heard about RDR and the MAS, I did not think I could hear anything further that could get me more exasperated. I was wrong! people who need help with debt counselling, OMO etc. need face to face advice not some half baked information on a web site that no one can understand. More money! What a joke.

  13. Maybe they shouldnt waste over £30 million of our money on advertising then!

  14. So how can the government make the decision to move debt advice to MAS when MAS is funded by an FSA levy and the FSA is meant to be independent?

  15. Just take a look at the US regulator, the SAC. It is funded mainly from taxation and is increasing staffing levels. The current CEO has run a policy of hiring personell who either worked in financial services, or legal prosecuters to slam the fraudulent in jail. This way she has hired persons who understand the complexities of product, systems and trading, then prosecute the guilty. It works!
    If our regulator followed this sucessful pattern, with some government funding, then we would be less critical and more supportive (albeit we would still moan about the levy).
    The MAS is no exeption to this rule. Without a huge levy on the payday loans companies, the unsecured lenders and others, how can they properly give debt advice? Or should this be accessed through the CAB, or both?
    A fair amount of people have increased debt because they no longer have a backstop of PPI, or income protection because the sales of these products have been deemed to be politically incorrect.
    When courts and regulators accuse companies of misselling, do they look at the longer term impact to the nations finances or the problembs that may build up over time for individuals? Endowments no longer exist, so most interest only mortgages have no repayment method. Pension misselling has led to the almost total demise of retirement savings except for the wealthy or lucky. Do the regulators and courts care? No. But you can bet your bottom dollar that IFAs will be targeted to pay for the cleanup.

  16. I dont think it is an understatement to say that UK personal financial services provision is in crisis.

    So may things are stacked against us – MAS, FSCS levies, FSA budget, fee resistant clients, providers switching off commission and pocketting it, providers planning direct sales forces to pester sell to clients we gave them…need I go on?

    I was proud to be in Financial Services and confident that I was able to make a positive difference to peoples lives, be generous with my time with clients, do the best possible job I can safe in the knowledge that on average I would earn enough (but not a fortune).

    Lately my passion and enjoyment for my work has been severely dented. This story adds another “straw to the camels back”, not sure how much more I can take. What keeps me going is the faith that I am doing the right things and will eventually be rewarded with a suviving, sustainable & flourishing business to pass on to my children who are following my career path (mad?)

  17. someday, maybe 30 years from now someone is going to sit down and say WTF why did we let the FSA and dumb politicans wreck UK financial services.

  18. Tricia Yates summed it up with 3 wonderful letters!
    Made me laugh!!! 🙂

  19. Please MM, if you are going to put such articles in front of us, then please commit to put the responses in front of the authors of what can only be described as uninformed drivel. Actually, maybe there is another word………..

  20. Has Lord Kirkwood taken leave of his senses?
    Underfunded?
    And How much does the main man of MAS get paid? Almost 3 times what our Prime Minister earns!! What a joke, what a waste of money!!

  21. If this wasn’t so serious it would be hilarious. Perhaps Lord Twit should have spoken up a bit earlier when they put Hobman on a starting salary of £350kpa.

    Just goes to show the true cost of providing ‘FREE’ advice….

  22. I feel much the same as ebirch.
    Level 4, SPS, adviser charging. all ready for RDR. but so fed up I have been off worh sick with stress for teh last 6 weeks which has meant I’ve laid off most of my admin staff (two under 20) as I just don’t knwo where this is all going.
    Debt advice should come from taxation and not a levy from advisers, particularly as so many banks are currently owned/proped up by the UK state. Surely this distrorts the figures for UK goverment spending compared to other parts of the EU?

  23. Don’t moan, just stop paying ! I would happily suspend all payments/levies if everyone joined in.

  24. Just two word’s “stupid twat”

    And on another point ! This idiot states

    “The Money Advice Service is now in a crucially important position to help people with Omo questions and decumulation issues as they approach retirement; it is an essential co-part of its work”

    Does the answering of these questions constitute advice ? I think it will !!

    So how many are level 4 qualified to give such advice ?

    You can see it a mile off the FSA/FCA will state this is how we are plugging the advice gap.

    MAS = Waste of money

  25. “Risks being swamped with enquiries”

    What a load of twoddle. This money should be used to direct consumers to their local financial planning firm, not unqualified staff handing out generic advice, people need advice, a more productive system would be to give the client a voucher for say £200 and refer them to 3 IFAs intheir locale, that way not only would the client benefit from proper financial advice and guidance, wouldn’t have to pay for it and the IFA would receive some benefit for the money being lifted out of our pockets by an unaccountable, uncaring and totally out of control body.

  26. @ Norse – whilst I am critical of the MAS and in particular about it’s name and remit and not paying had occurred to me, especially as the FSA collect the money on behalf of the MAS and hence I think there could be an argument for submitting seperate cheques for the FSA fees and refusing to pay the element in respect of the MAS, the slight problem is what i actually get for my MAS levy.
    My firm is directly regulated and the MAS levy comes to a grand total of £10 per annum. I get £10 worth of value from MAS as I provide the MAS leaflets to many clients as I actually like the leaflets in that they are not spinning an insurance companys opinions.
    I also like to use the annuity comparison tables as they are qhat the consumer see and for several clients with less than £20k to invest, I have directed them at the annuity tables and declined to advise and then had the clients come back to me for information and not advice as the information and help they got from the MAS helpline and website was insufficient for them. I have then helped them whilst clearly ensuring I did NOT give advice and can prove it based on the recordings of the conversations with them and have then just charged them for my time and not the risk etc.
    I have posted this anon for that reason.

  27. How is it that, as an IFA, I should have to pay for someone else’s debt advice. The individual with debt problems, often caused by their own stupidity and the complicitity of the banks, should have access to help and guidance – but why should I pay for it. Why shouldn’t car salesmen pay for it. Or, why shouldn’t the BBC pay for it. Or why shouldn’t Prince Charles pay for it. Why me for f**** sake !!!

  28. After yesterdays story I asked how long it would be beforen the MAS said “we’re not working so give us more money” Answer 24 hours from some idiot. There is a link on the LibDem website to our Lord, which no longer seems to work, a bit like his brain then.

  29. @ Anonymous | 30 Nov 2012 1:34 pm

    I’d keep very quiet if I were you. If my MAS levy was £10 a year I wouldn’t be unhappy. It works out at around £600 for us against a relatively modest turnover.

    Do I get £600 worth of benefit? No.
    Would I be happy with a levy of £10? Oh yes

  30. i would willingly sell my house and all its contents to help fund the MAS

  31. Put the Old Bugger out of his dribbling misery and shoot him!

  32. Lets get this in perspective!

    Decide on a service you wish to provide!
    Force it through despite any negative effects it may have on established business!
    Make the established business pay for it!
    Then bitch about it afterwards!

    Hmmmmmm??????????

  33. Saint Francis of Assisi 30th November 2012 at 2:18 pm

    Watch and Learn.

    The MAS demonstrates just how far you can go without needing to be authorised and regulated by the appalling FSA.

  34. @ Soren Lorenson | 30 Nov 2012 1:49 pm
    My turnover is about £70k (profit a lot lower of course), but £10 is well spent on the leaflets. I suspect your turnover isn’t over £4 million, so I wonder why your MAS levy is so high at £600? I wouldn’t pay that if I were you as you could do a lot with £600.

  35. I have just received a message from outer space!
    They want their special agent back as soon as possible-apparently his code name is ‘Lord Kirkwood’
    They say that he is genuinely from another planet!!
    We must not believe a word he says!

  36. Hello Playmates!

    I’d rather have a bottle in front of me than a frontal lobotomy!

    Love and kisses

    Larrykins xxxx

  37. Re earlier comments. I wasn’t saying we should stop paying our MAS charges, I was saying we should stop paying for everything! It would bring the FSA to their knees in a matter of months, the subject of our incompetent and regulator would be forced into the public and media domain.

  38. When I started reading this article I was wondering how anyone could be so stupid….then I saw he is a Lib Dem!

  39. What was wrong with the Citizen Advice Bureau? Cant they give the advice required? Why should the industry fund this??? Dont we have leaders who can point this out and stand up against this ridiculous organisation? Let the government pay for this if they want! They want to reduce their deficit and pile the extra cost on us?

  40. You guys don’t know the half of it–trust me, if you did your blood would really boil over. Mine does.

    MAS insider

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