The Money Advice Service (MAS) has been heavily criticised in an independent report.
The review was conducted by Christine Farnish for the Treasury.
Andrew Tyrie MP, chairman of the Treasury Committee, said: “The Treasury Committee concluded that there was a lot wrong with the MAS. Its inquiry identified a number of serious concerns about its effectiveness and value for money. The Committee considered carefully whether the MAS should be abolished, but concluded instead that an independent review should examine the role of the MAS in depth.
“The independent review published today is welcome. It makes some helpful suggestions for reform of the MAS. It echoes a number of the Committee’s recommendations, including that the MAS should have a greater role in the provision of financial education in schools and should convene a working group on debt advice. Christine Farnish – the independent reviewer -shares the Committee’s concerns about the high spending by MAS on its website and marketing. She has also expressed concern about the extent to which the MAS may be duplicating the work of private and voluntary sector providers. On the latter, she concludes that the budget for the MAS’s consumer finance education role could be halved.
“However, the crucial question of the MAS’s future as a statutory body was excluded from the reviewer’s terms of reference. MAS have now been asked to respond to Ms Farnish’s report in the autumn. When the Government considers that response, it should also consider the MAS’s future as a statutory body.”
Caroline Rookes, chief executive for the Money Advice Service said: “The review has challenged the way we do our money advice work in particular. All organisations need to evolve as circumstances change, especially new organisations such as ours.
“In addressing the money advice recommendations, we want to ensure that changes we make are genuinely in the interests of consumers and deliver value for money. We currently help thousands of people every day to take action to manage their money better and in contemplating changes, we must not let those consumers down.
“So we will now work closely with the FCA, the financial services industry, consumer groups, the voluntary sector and other experts, to assess how the recommendations could be implemented in a way that would best benefit consumers and enhance the financial capability of the UK.”