Caroline Rookes, chief executive of the Money Advice Service, welcomed the Treasury’s independent review of the Money Advice Service, telling FTAdviser a recommended shift away from general advice including slashing its budget is not a “sea change”.
The report, which followed a review led by former chief executive of the National Association of Pension Funds Christine Farnish, recommended extending Mas’s services on debt advice and drastically reducing its role in education to avoid duplication.
Alongside an estimated suggestion that the £43m budget for ‘education’ activities could be halved, it suggested Mas use its resources to set up a “one-stop shop” phone line for consumers, use resources to grant fund initiatives to deal with the advice gap and cut direct marketing.
Speaking to FTAdviser, Ms Rookes said the implied shift away from general financial education and to debt advice was actually a continuation of recent trends and was always likely to be the direction of travel, given the FCA’s expanded consumer credit remit.
“There is no doubt that Christine’s report is suggesting some enhancements to debt advice... but it’s at the margins, it’s not a huge swing from one to the other. Over the coming year we may see more movement towards debt because of the FCA’s consumer credit regime.”
She added that on the debt side a lot of the suggestions made by Ms Farnish were “very sensible” and that the recommendations are about doing more of what Mas was already doing anyway.
Ms Rookes said that discussions around additional funding in this area - the report noted voluntary contributions of £2m from water and energy groups taking the total debt advice allocation to £40m, with “strong potential for significant additional funding in the future - was “fantastic”.
She pointed out that Mas had already anticipated a greater demand on the debt side of its work and so is shifting funding, boosting funding for debt by 20 per cent next year by reducing the amount originally earmarked for education.
Discussing the specific comments in relation to the recommended education budget cut, Ms Rookes said the figures in the report are presented as being “illustrative and not evidence-based”.
“More work must be done before they any conclusions are drawn,” she added.
She acknowledged in general the report’s implication that Mas needs to “move more quickly” in its reforms, adding that the body intends to do some work with stakeholders on the recommendations with a view to drawing conclusions by autumn.
Under the terms of the review, Mas must give its views to the Treasury, which will subsequently produce full findings and decide what action to take later in the year.
Elsewhere, Ms Rookes said that two years ago when she began the role of chief executive she was very keen to work with other organisations and has carried this on throughout her role. Again, Ms Farnish’s report suggested greater engagement, especially with regulators.