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MAS told to slash costs and cut staff by almost two-thirds

The Money Advice Service has been told to cull up to 60 per cent of its workforce and cut its budget by £30m as part of recommendations of a Treasury-commissioned review.

The service has been under pressure from Treasury select committee chair Andrew Tyrie and was overlooked for delivering the Government’s flagship pensions guidance service in October.

A draft copy of the review, led by former FSA consumer director Christine Farnish and launched in April, recommends cutting full-time staff from 130 to 50, and reducing the MAS budget from £81.1m to between £50m and £65m, according to The Telegraph.

However, the Treasury has previously ruled out scrapping MAS entirely.

The report says the biggest cuts should be felt by the “money advice” arm of the organisation, with the division that focuses on debt management spared.

The report says firms in the utilities sector have agreed to contribute £2m to the MAS budget this year, with a view to increasing their contribution in the future.

Personal finance media and charities are already providing information being offered by the MAS, the reports notes.

It says: “There is a high degree of duplication between the MAS and other websites which offer content on financial issues.

“We question whether a body like the MAS… should even seek to compete with the wide range of other bodies which already have trusted brands and extensive consumer reach. It still has an important job to do but change is needed.”

It also suggests moving the head office out of central London to further lower running costs.

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Comments

There are 15 comments at the moment, we would love to hear your opinion too.

  1. It is one thing to start looking at duplication and costs, but who authorised the excessive costs and business plan in the first place?

    it is easy to spend OPM when they don’t have a say in what is taken from them and how it is spent. MAS should be funded by taxation not random levies.

  2. The MAS is a complete waste of money, and now is the time to completely close it down.

  3. E L Wisty (an only twin) 15th December 2014 at 9:32 am

    A very sensible decision, and immediate savings could made by dispensing with the services of La Rookes.

  4. are we getting a refund?

  5. All they need is a website that states: “Other places do this sort of thing much better than we ever could” and then a load of links to unbiased/CAB etc etc.

    £81 million saved instantly!

  6. The IFA community has been saying for years that MAS was a waste of money and not fit for purpose. Can we have our money back please.

  7. Derek Bradley ceo Panacea Adviser 15th December 2014 at 9:53 am

    “We question whether a body like the MAS… should even seek to compete with the wide range of other bodies which already have trusted brands and extensive consumer reach”

    An interesting and most likely ‘told you so’ conclusion.

    Does anybody in the Treasury or the world of regulation ever listen before forays like this are initiated.

    Readers may find this of interest https://www.panaceaadviser.com/main/st6232.htm

    And this http://www.panaceaadviser.com/main/st9010.htm and example of MAS ‘grooming’ complainants

    And redundancy payments?

  8. Firstly; can I thank MM for the picture at the top of this article as I now have something to pin on my new office dartboard !!

    Secondly; its a start but full closure would be preferred and the reduced budget, redirected to CAB !! MAS and its CEO (in particular) have lost all credibility (not that it had a lot to start with).

  9. A great deal of OPM could have been saved had all this been rigorously examined BEFORE the MAS was set up. It’s interesting too to note the recommendation to relocate the MAS outside central London with a view to reducing costs. Two thirds of the currently fire-proof FCA should be similarly relocated, not to mention made subject to the imprimatur of an independent body to control its endless profligacies. Were such a body to exist, the first item on its agenda would have been to restrict the appalling sums of money spent on the FCA’s review of its bungled handling of its proposed closed book review, followed in short order by its plan to maintain Clive Adamson’s salary for 6 months following his departure.

  10. The best advice to anyone is save more of your income for a rainy day and borrower as little as possible, but if you have to then repay it back quickly. This wisdom is centuries old, but unfortunately MAS could not communicate this simple message to consumers and hence one of the reasons we have high average household debt in the UK.

    Especially in the role of educating the young; where MAS has spent money on trendy radio adverts, I think they have failed in this respect. As a result, the younger generation are poorly equipped to budget and plan their finances and make rational spending decisions. It is even more harder for them to save a deposit for a house when they are relying on expensive short-term credit to fulfil discretionary expenditure.

    MAS is an organisation which lacks focus and purpose. It should be scrapped.

  11. Calm down folks. This is a Quango and they are experts at wasting what Julian calls OPM. Personally I think the cut is in the right direction, but 40% short of target. However if you read it, it says ‘full time staff’. Does that mean they’ll load up on part timers and zero contract sub contracted workers?
    Basically this is a condemnation of the service (non-service?) and those who have written the report didn’t want (no doubt for political reasons) to tell it how it is and suggest the whole thing be binned.

  12. The smell of burning fresh air in the morning…I think it is right to retain the debt management arm, Lord knows what will happen when interst rates start to go up, or maybe the Treasury knows something we don’t.

  13. Will this mean that La Rookes will be in for a 60% pay cut seeing as her “responsibilities” and size of the organisation are being reduced?

    I’m not holding my breath….

  14. It still works out at £1,300,000 per employee too much !!!!

  15. Just imagine what someone from the real world with actual targets and aims, could have done with eighty million a year. Instead they (we !) gave it to specialist quangocrats, and did not ask them to achieve anything Their sole purpose seemed to be to spend the money. Somehow. Anyhow. Just spend it !!
    (It will cost an absolute fortune to get eighty staff to move from full time employment to highly paid consultancy via garden leave and redundancy pay off. Normal Quango rules indicate that this will get worse before it gets better.)

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