The Treasury is to launch an independent review into the Money Advice Service before the end of this parliament.
The Treasury select sub-committee carried out an 18-month inquiry into the MAS. In the inquiry report, published in December, MPs attacked the MAS as
The MAS came under fire during a Treasury select sub-committee into the service in December, with MPs branding it “not fit for purpose”. MPs said they would grant the service a “stay of execution” subject to an independent review.
In a letter to the Treasury select sub-committee, published today, Treasury financial secretary Sajid Javid said an independent review would be carried out into the MAS befor May 2015.
In the letter, Javid says: “The Government agrees with the sub-committee’s central recommendation that this should be an independent review. We believe that an independent reviewer will bring a fresh perspective to this important issue, building on the work of the sub-committee and the National Audit Office.”
He added futher details about the review would be announced shortly.
The Treasury committed to carrying out a medium-term review of the MAS when the service was set up in April 2011, though this would have been Government-led rather than carried out by an independent third party.
Treasury select committee chair Andrew Tyrie has called for terms of reference of the inquiry to be published immediately. He also wants the review to be carried out this summer.
He says: “I welcome the Government’s change of mind. It now agrees this review should be independent, rather than Treasury-led.
“Our report called for the results of the review to be published no later than summer 2014. Given the MAS has now been asked by the Treasury to play a role in creating the new financial guidance for pensioners, it is even more important that the Government gets on with it.
“The MAS was not in a healthy state and some worthy attempts have now been made to reform it. The jury remains out on whether the MAS should be retained in its current form.
The MAS was criticised in December by the NAO for not providing value for money in its money advice services.