Treasury orders review of service
9:43am Saturday 29th March 2014 in © Press Association 2014
An independent review into an under-fire financial advice service has been ordered by the Treasury.
Economic Secretary Sajid Javid accepted MPs' calls for the probe into the Government-backed Money Advice Service.
He was responding to a Commons committee report which concluded the MAS was "not currently fit for purpose".
It was also criticised by a public spending watchdog for failing to reach out to those most in need of advice and not providing value for money itself.
Mr Javid said the Government had long planned to examine its work but that an independent reviewer "will bring a fresh perspective to this important issue".
The chair of the committee, Tory MP Andrew Tyrie, said it was especially important given the role handed to the MAS in drawing up guidelines for pensioners.
"I welcome the Government's change of mind. It now agrees that 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 that 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.
"A central task of the review will be to assess whether we should continue to channel £80 million or thereabouts each year through the MAS."
The Money Advice Service (MAS), which gives free, impartial money tips, spent £18 million on a recent publicity drive including TV, radio and print media, building brand recognition through its "What does MA think?" campaign.
A report by the National Audit Office (NAO) said that while this raised awareness and prompted a 400% increase in visits to the MAS website, the service has not yet sufficiently reached out to those who need its advice the most.
The Treasury Sub-Committee found that an initial failure effectively to consult and build relationships with existing organisations in the sector resulted in it duplicating what was already being provided in the private and charitable sectors.
The service, which is funded by a levy on the financial services industry, was set up in 2010 in response to a review which estimated that 19 million people in the UK would benefit from generic financial advice.
The two main objectives the service was set are to enhance the public's understanding and knowledge about financial matters and their ability to manage their own financial affairs.
Its budget last year was £80.8 million, including £34.5 million allocated to its debt advice programme.