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MPs grant MAS ‘stay of execution’ but say service is ‘not fit for purpose’

The Treasury select sub-committee says the Money Advice Service is “not fit for purpose” and in need of a “radical overhaul”, as it publishes its damning inquiry into the future of the service.

Following a year-long inquiry, the Treasury select committee has today published its report into the effectiveness of the MAS. 

MPs say they considered recommending MAS be scrapped completely, but have granted it a “stay of execution” until the findings of a Government review into the MAS’ objectives are published. The National Audit Office is to publish a separate report on the value for money delivered by the MAS later this week.

The Treasury is set to carry out a review of the MAS between 2013 and 2015. But the sub-committee is calling for the review to be brought forward “as a matter of urgency” and be conducted by an independent body rather than the Treasury over concerns it may have already decided the service should continue in its current form.

Sub-committee chairman and Labour MP George Mudie says: “The MAS is not currently fit for purpose. It is far from clear it has adopted the right strategy or even that it is performing the correct role.

“In finalising this report, the committee considered carefully whether to recommend the MAS be scrapped completely.

“Given the Treasury had already announced its intention to conduct a review of the MAS, we were persuaded to grant a stay of execution.”

Key findings 

He says the Treasury review must assess whether the MAS should continue to exist, and if so, how it can overcome the “serious problems” exposed by the sub-committee’s report. He adds the Treasury’s findings should be made available by scrutinty of the Treasury seclect committee and others by the summer of 2014. 

He says: “People up and down the country need access to high quality money and debt advice. If this is to continue to be facilitated by a public body, a radical overhaul is needed.”

The report found the large amounts of money spent on marketing by the MAS in its early years suggest a strategy to build a separate brand was “misguided”, and that the service’s failure to effectively consult with existing providers has resulted in the duplication of services in the private and charitable sectors.

It says the service’s accountability to the FSA was “confused and misguided” and the review should consider whether the FCA needs additional statutory powers to hold the MAS to account. This could include powers to intervene on operational matters and additional powers to scrutinise the service’s budget.

Executive salaries

Caroline Rookes became chief executive of the MAS in February on a base salary of £140,000. She replaced Tony Hobman, who received total pay in excess of £350,000 a year.

The report says in appointing a new chief executive on a considerably lower salary than her predecessor, the MAS, FSA and Treasury appear to have recognised the remuneration of the former chief executive Tony Hobman was “excessive”.

But MPs say while this is welcome, the decision to pay Hobman so highly in the first place, and the fact that two members of staff continue to be paid more than Rookes, “risk undermining the credibility of the organisation”.

MAS strategy and innovation director Mark Fiander, and marketing and service delivery director Karen Broughton, are both on a base salary of £160,000. 

The report says the Government review should examine the remuneration of the MAS’ senior staff and should seek legal advice about whether existing salaries could be reduced.

“The MAS is fit for purpose”

In a statement, Rookes says: “The MAS is fit for purpose.

“The committee’s findings are largely based on evidence taken well over a year ago. Since then, we have, with the FCA, appointed a new chairman and chief executive, and changed the direction of the organisation to focus much more on working with partners to help customers. What is more, we have already done much of what the committee recommends.

“We will work with the Treasury and the FCA to respond to the findings of today’s report, in the context of the NAO’s conclusions.”

Money Marketing revealed in March 2012 the committee was launching an inquiry into the MAS.

During the inquiry MPs hit out at the MAS for not being clear about its objectives and failing to deliver value for money.

An FCA spokesman says: “The MAS has an important role to play in providing free, impartial advice to help people better manage their money.

“Under a new senior team, including a new chief executive and chair, MAS has begun to implement many of the recommendations of today’s report. The FCA welcomes these developments and will oversee this work.

“We’ll be discussing the committee’s findings with MAS and the Treasury to agree what further steps should be taken.”


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There are 10 comments at the moment, we would love to hear your opinion too.

  1. So this expensive folly still staggers on !

  2. Try this at home folks.

    I have regularly used the MAS to research best buys for cash deposit accounts.. I make a shortlist of likely candidates and then ring up – only to be told that the rates quoted on MAS are months and months out of date and these rates no longer apply.

    If this is the situation for a relatively simple product how bad is the information on the rest?

    It seems that:

    It isn’t being used
    People in general regard it as a waste of time and money
    The information it carries is inaccurate.
    It costs a kings ransom – for what?

    For goodness sake put it out of it’s misery and close the flaming thing down.

  3. Questions:-

    Why weren’t we consulted about its formation?

    Why wasn’t the MAS’ proposed modus operandi scrutinised by and subject to the prior imprimatur of any outside body?

    Was any sort of prior Cost:Benefit Analysis undertaken?

    Does the MAS revisit those who’ve availed themselves of its guidance to check on how well or otherwise, a year down the line, they’ve maintained whatever action plan may have been recommended to them?

    Since the formation of the MAS, have significantly more people effected personal and family protection plans, embarked on long term savings plans or seen any measurable improvements in their ongoing family budgeting and finances?

    Why, on the one hand, is the MAS allowed to call itself an advice service whilst, on the other, forever claiming that all it offers is guidance?

    Has any Benefits:Cost Analysis been undertaken to determine whether or not the MAS is remotely worth the £80m of our money that it spends every year?

    Wouldn’t an Independent Regulatory Oversight Committee, if only we had one, have ensured that the MAS was set up on a proper footing with a clearly defined set of objectives and, on a regular basis, required it to report to the Committee to justify its existence?

    Who approved the MAS’ salary scales?

    Is anyone at all convinced by Caroline Rooker’s claims as to what a great job the MAS is doing?

    I think the answers to all these questions are self evident and a pretty damning indictment of the whole sorry, extravagant and ineffectual enterprise. Isn’t the MAS, in reality, just another extravagant and largely unaccountable government quango funded by OPM, with anyone who refuses to pay their levies subject to confiscation of their livelihood?

  4. @Harry

    For years I used the FSA consumer site to start discussions about annuities and Pensions. Admittedly the results were generally out of date but clients could see where I was headed.

    When Ma took over the annuity section was suddenly not only shortened but also contained links to commercial tied agent as well as direct to provider sites. Hobman just shrugged his shoulders. If ever a man got away with money (much too much ) it was him.

  5. Am i the only one who suspects that the plug would of been pulled instantly if MAS was funded through the tax payer?

    As it’s us paying of course the MP’s decided it can have a “stay of execution”. We’ll continue to fund while others decide if it is needed.

    The MAS budget should be spent on educating the public about the virtues of advice/shopping around/options at retirement etc

  6. SCRAP IT. It’s a waste of money. It’s not a government’s job to give people financial advice any more than it’s a government’s job to sell groceries, provide accountancy or legal services. SCRAP IT and do so quickly, before it burns many more £millions.

  7. I don’t object to the amount I pay for MAS. I object to the salaries and it’s title it should NOT be the Money Advice Service it should be the Money Education Service. Unfortunately that would be too accurate as it would not only confirm what it should be doing i.e. educating, but it’s abbreviation would sound to accurate and would have to be preceded by COMPLETE…………………………………MES.
    This is a TAXATION on clients with money to support consumers WITHOUT money. Make Carolyn Rookes deputies redundant NOW or reduce their salaries and DON’T you dare bill the redundancy or employees legal challenge t the excessive wages to the FS sector, bill in to NuLibor or the current government.

  8. A) Harry is bang on the money. I looked up the MAS best buy deposit rate, then went to the Telegraph and immediately on the home page found a deposit taker advertising a higher rate. Hopeless.

    B) It’s Janet and John banal. We genuinely have on the site a Christmas money planner, with Wongaesque sliders an’ all. So I just put in that I had £25 of cash in hand, and I intended to spend £1800 odd on Xmas, and hey, guess what it said…” Your total Christmas spend slider will turn red if you go over budget. Check or Uncheck items to shape your plan. Move sliders to adjust your costs”. The Almighty wept.

    The handy advice for my profligate overspend is “Set yourself a budget: Once you have set your budget using our Christmas money planner, make a list of everything you intend to buy then revise it with cheaper alternatives where you can. Don’t be tempted by two-for-one, three-for-two, mix-and-match or other enticing offers. They may not be as good value as they appear. Check the original prices to make sure that they really are value for money. Only buy multi-buys if you really need them.

    I think I’d need to work out everything I was going to spend BEFORE sliding them into this rubbish.

    There’s a lovely juvenile countdown clock to Christmas as well – whoopee! We’re all kidults now.

    Check it out. Its’s pathetic. And all for just £80m. To paraphrase one of its budgeting tips…”They may not be as good value as they appear.”

  9. Not sure why anyone would use MAS for cash rates,surely etc do a far better job ,always up to date and comparisons available ,and would be the first port of call for the public anyway? MAS is a waste of money and we would be better spending this on our armed forces or border controls surely? Going to mail my MP now,thanks for all the points above!

  10. @PaulB – Moneyfacts, been doing it longer than and I trust them more.

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