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Money Advice Service admits to errors

Money Advice Service admits to errors

The chief executive of the Money Advice Service has acknowledged the body has made grave errors in the past, including on marketing spend, adding MPs were right to intervene.

Speaking at a Treasury sub-committee hearing yesterday (5 February), Charles Counsell, a previous executive director at The Pensions Regulator, said he accepted the inflated marketing spend in the body's early years had not been effective to reach more consumers.

He said: "In the early days we did things which, in retrospect and the help of this committee, we have changed.

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"We know know that this year we get something like 29 million visits to our website and that is with zero marketing spend.

"That is through search engine optimisation, working with partners and others. So [there has been a] big change in the way we have approached that."

Chairman of the body, Andy Briscoe, who was also at the hearing, agreed the service was a very different organisation now to what it was in 2013.

Mr Briscoe, who has been with the body since the early years, said: "This committee was very concerned about the original business model that the Money Advice Service had, which was to plough its own furrow and to be digital first.

"And [that] in order to do that it needed to spend a lot on marketing both to build brand awareness but also to try and get the public to engage with their money.

"Crucially [MPs found] the service wasn't harnessing the many thousands of organisations that can impact financial capability. 

"The committee was quite correct to say that the model was in radical need of change and I am proud of the speed and the hard work that then went into changing the organisation."

The Money Advice Service (Mas) was heavily criticised for its expenditure by MPs in the early years.

Mas' core budget for the 2012 to 2013 financial year had risen 6 per cent to £46.3m, with £20m earmarked for marketing alone. 

In December 2013, the Treasury select committee stated in a damning report that Mas appeared to be overly expensive and providing a redundant service that duplicated services already available elsewhere in the market.

An independent report carried out by financial policy veteran Christine Farnish in 2015 called for a radical overhaul of the body's business structure, including radical cost-cutting in areas such as marketing and a move away from guidance provision towards the commissioning of services after it found Mas had spent more than £100m on developing and promoting its website.

Mr Counsell explained one of the body's greatest achievements to date was "the fact that since we have taken over the role of commissioning debt advice we have increased the supply of debt advice from approximately 100,000 sessions per year to about 470,000 this year."

He said: "We’ve reduced the cost of those from about £270 per session to on average about £100 and that covers face to face, telephone and web-based debt advice.