Despite strong criticism from politicians and the financial services sector, the Money Advice Service has published business plans that reveal only a modest 1 per cent drop in its budget and a stable money advice marketing budget of close to £13m for 2014.
In its business plan consultation for 2014/2015, Mas revealed it will spend a total of £77.5m in 2014, a drop of just £800,000 compared to this year. This drop is entirely the result of a drop in the budget related to ‘money advice’ activities, which has fallen by 2 per cent to £43m.
Of this, £12.7m has been set aside to cover marketing activities for the service’s core ‘money advice’ proposition, the same figure as was set aside last year.
Earlier this month the Treasury Select Committee issued a scathing report of the service, suggesting its offering is redundant and that it would not help to close the ‘advice gap’. At the heart of the criticism was concern for the service’s marketing budget, which had been around £20m across its money advice and debt advice activities.
Mas’s plan reveals the marketing spend is part of a drive to ‘normalise’ the taking of advice on money matters, especially during significant life events such as buying a house or getting a divorce. It said it will augment this by working more closely than before with financial advisers.
The report said: “We will work with the financial adviser community to make sure that customers who need regulated financial advice are directed to the right part of the financial services system at the right time.
“Money advice should be easy to find, something that friends and family talk about, and an accepted part of everyday life.
“Our research suggests that people are receptive to money advice when they are facing big life events - such as buying a home, going through a divorce or separation or retiring. These are also the times when there is a risk of financial detriment if people do not make the right decisions.”
Mas had responded to the Treasury Committee report by saying it was based on out-of-date information and that it had already worked to correct many of the issues raised, particularly relating to duplication of content with existing providers.
Another report from the National Audit Office found that although the Mas does offer value for money on its debt advice service, it had not “sufficiently targeted its interventions to those who need it most,” specifically those without access to the internet.
In its business plan, the Mas subsequently revealed it was cutting almost £1m off its budget for telephone and web chat services, noting that it is “working on a channel shift”. In contrast it added £546,000 to its budget for delivering face-to-face sessions and £346,000 to its digital budget.
