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Over half of MAS staff receive £4m redundancy payout

Money Advice Service

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.

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Comments

There are 32 comments at the moment, we would love to hear your opinion too.

  1. Remind me again…Who’s paying for this?

  2. What a total waste of money !!! some-one some where needs a real kick up the arse for this nonsense.
    Why oh why did they not give CAB extra funding and these are the ones who need it and do a good job !!

  3. A Waste of our money employing them and a bigger waste of money making them redundant.
    Quango business planning at its best!!!!!!!

  4. If around 90 people have been made redundant that means an average payout of £45,000. That seems like a very generous redundancy scheme! Definite feeling of ‘other people’s money’ syndrome.

    They are now looking to hire more people to fill slightly different roles. That will have huge costs too.

    As an aside, I wager that none of those made redundant will “speak to MA” about how to invest the money. Most banks won’t deal with them either as no longer profitable customers under RDR.

  5. Peter Davies @ Create Wealth Management 30th January 2013 at 11:49 am

    This conclusively proves that the running of MAS has been a complete and utter shambles since the word go. Another £4million wasted. This non-government organisation has lacked detailed planning in its design and purpose. The hiring and firing of staff clearly hasnt been thought through sufficiently. What wasteage there has been. The old saying jobs for the boys at the top once again comes to mind. The country’s finances are in a mess and what do we see but £4m being spent on redundancies for people who havent been in there posts for 5 minutes – shocking and another fiasco in a long lines of other fiasco’s from this shambolic government. Better not get me onto child benefit!!!

  6. So £4m paid out to 84 staff members (150 down to 66) means an average redundancy payment of £47,619 each – not bad for less than 2 years in the job!

  7. What kind of salaries are being paid to get a redundancy bill of that amount in a firm so small and young, and where do I get an application for one on the new roles!

  8. The gravy train of free money to those taking redundancy (paid for by regulated firms) rolls on. Even so the MAS Budget remains eye-wateringly high at £78.3m!

  9. Just like the FSA and FOS if the consumer needs and wants the services they should pay for them through taxation not the industry by levies. Then perhaps their would be more control over their expenditure and budgets.

  10. I dont think its fair to average the payout. More than likely the general staff got 1-3 months pay and the management got up to a years pay.

  11. Words fail me (almost). It makes me very, very angry when I think of the thousands who have lost their jobs, businesses, even their homes, as a result of:
    1) FSA failure to head off the banking crisis
    2) FSA support for dual pricing and non-advised mortgages and
    3) RDR.
    None of these people got pay-offs from the organisations responsible for their demise and yet industry money goes to compensate these failures.

    Truly sickening and the one saving grace is the recent acknowledgement that SMEs should pay far less to support this quango.

  12. Crikey, it sounds like the air-heads who thought the MAS would be a great idea (for who?) could do with some, er…. financial advice.

    Unfortunately, I cannot afford to offer FREE advice. I wonder why?….

  13. Give me bloody strength !!!

  14. How long do we have to keep taking this. Its a joke how our money keeps being wasted on some stupid idea that some unaccountable government department has. When are they going to listen to feedback and ideas from the ‘front line’ and acknowledge that they keep getting it wrong. HIPS, Stakeholder Pensions, child trust funds,MAS, shall I go on???!!! They just keep missing the point over and over again, and us mugs keep paying for it.

  15. Just thinking, at say £1,500 for a full financial review from a level 6 adviser, 2,666 folk could have had proper financial advice for the cost of the redundancy exercise. Even better, with a £78.5m budget that goes up to 52,333 folk. Every year. Would that close the advice gap? It might help…

  16. Easy to do when you have a tap of money to turn on and off as and when you need it and not have to worry about to to make the money in the first place.

    If only we could all run our businesses on the same basis.

    If the Government wants to provide unregulated advice to consumers then the tax system should pay for this. Some would even argue it is direct competition to some of those who are regulated.

    This further proves that the FSA and Government are totally incompetent to waste so much of our money.

    Don’t see them apologising to those who have no choice but to pay though.

  17. And these are the people who are supposed to be qualified to give the general public free financial advice….?????

  18. The larger payouts stemmed from the fact that most were ex-FSA employees (and some Bank of England before that), so they got redundancy payouts based on time spent at those organisations as well, often going back over 20 years. What the article doesn’t mention is that many of those made redundant eventually returned to the FSA, often for higher salaries than they had at MAS! In the meantime, MAS realised it was understaffed so employed consultants at around £400 a day.

    MAS’s chief executive, Tony Hobman, who oversaw the entire fiasco has since resigned.

  19. RegulatorSaurusRex 30th January 2013 at 1:17 pm

    £1,500 for a financial review???

    Are you serious?

  20. Peter Chadborn nailed it when he spoke of the OPM syndrome and the catastrophic failure to plan ahead.

    When the quango is fed by those it seeks to bypass then any vestige of accountability is blown away.

  21. @Regulatorsaurusrex

    Depends on the client and the scope of work but sounds about right to me for a comprehensive review:

    5 hours adviser time at £200 per hour, 4 hours of admin time at £50 per hour, 3 hours of para planner time at £100

  22. Surely the CEO Tony Hobman should receive a knighthood!

  23. RegulatorSaurusRex | 30 Jan 2013 1:17 pm

    £1,500 for a financial review???

    Are you serious?

    Don’t you know this is the modern utopia post RDR where the highly qualified adviser can name their price? The only fly in the ointment is the unwillingness of the general public to actually pay this amount. Of course the highly qualified adviser will only want to deal with the high net clients that are out there, that we all want to deal with so I only hope there’s enough of them to go round. There are of course level 6 advisers who don’t know very much about very much at all but in this brave new world where experience counts for nothing the holder of the qualification is king. Long live the king until the next one arrives that is….!!!

  24. I detect a lot of cynicism here today. Fortunately I am more sanguine as I really do know the inmates took over the running of the asylum years ago. The role of the rest of us with a bit of sense and ability, is to pick up the pieces until of course we decide no more and head off for a life of sun and sangria. The problem then is who will be left to run things. Another social problem on the horizon!

  25. Hello Playmates!

    So the consumers they were working to help all along were just themselves. How sweet. How cozy. Dolling out the lolly to each other must have been great fun.

    Love

    Larry xxx

  26. £1,500 looks cheap for a financial review in my opinion. No wonder so many IFAs arent making any money.

    You’re not a charity chaps!

  27. And just who authorised these (for no more than 2 years service) very generous redundancy payments? Were they subject to approval on the part of any outside agency or regulatory committee?

  28. A friend of a friend of mine with 30 plus years experience in Provider, IFA and retail brands applied to MAS for a job. He really thought he could help them out and bring some real world experience into the team. They ‘lost’ his application for 2 months and then offered him a telephone interview. Just after 5 minutes they called an end to the interview! There was a question that they didnt like the answer to. It was regarding their website, yet the job description had website design as halfway down the key areas! He was appalled – given noi time for them to find out what he could offer and selected against one question that wasnt even a number 1 priority.

  29. That works out at around £26K plus, per employee on average.

    I wish the FSA would make me redundant and pay me that amount to leave the industry, they have after all made most small IFA practices like mine virtually worthless as a saleable asset with the changes currently being implemented and future changes to impact on those small practices with a trail/renewal commission income, built up over many years.

    What a complete and utter shower!

  30. My disgust is the apparent way they have to employ over 20 developers on over 450 per day to manage 1 web site that in development cost over 7 million uk pounds to deploy.

    Defies belief in the modern world of solution design and development being one of the most cost effective areas in ICT.

    This disregard by senior management to understand,challenge and cross examine cost and seemingly care is gross negligible and they should be held to account it should be noted as part of the Treasury Select committee reviews and relevant MP’s that this complete disregard and utter waste should be a crimonal offence.

    hang your heads in shame MAS Board !

  31. Have they been employed sufficiently long to have redundancy rights?

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