The Money Advice Service has completed its strategic review which has seen over half of MAS staff lose their jobs and receive redundancy payouts totalling £4m.
MAS has cut the number of full-time equivalent permanent staff from 150 in November 2011 when the review began to 66 now and employs an additional 27 staff on an interim basis.
A MAS spokeswoman says it is now looking to recruit people on a permanent basis for many of the 27 interim roles.
She says: “The review reduced the size of the organisation but also created new roles. To deliver the corporate objectives set out in our business plans we needed staff with different skill sets than were previously in place. At the outset all new roles were advertised internally and everyone affected by the changes was consulted. The service transformation is almost complete and we are now a leaner organisation.”
When the MAS was set up in April 2011, all 150 employees came from MAS’s predecessor body the Consumer Financial Education Body. Redundancy payouts to MAS staff have been based on FSA redundancy policy, which awards staff who have been with the regulator for over six months and less than two years a sum equivalent to 13 weeks of basic salary.
Staff who have been with the FSA for more than two years receive the 13 weeks of salary amount plus an amount equal to two weeks for every full year worked after two years, 0.5 week for every year worked for those over 40 and under 45, one week for every year worked for those over 45 and under 50, and 1.5 weeks for every year over age 50.
Redundancy payouts are capped at the greater of one year’s salary or £100,000.
Plan Money director Peter Chadborn says: “Any organisation that needs to halve its workforce within two years of launching has grossly miscalculated the workload.
“Hiring on the basis of different skill sets is no justification, as this should have been identified at the outset. This smacks of public sector incompetence at its worst, and ‘other people’s money’ syndrome.”
The MAS is now consulting on changes to the way firms are levied to pay for the service, with costs allocated to FSA fee blocks based on how consumers use the MAS service. If approved, advisers’ MAS levies could fall 93 per cent from £4.6m to £300,000.
The MAS has proposed a total budget of £78.3m for 2013/14, with £43.8m allocated to money advice and £34.5m for debt advice.