FCA wants ‘value for money’ study on Money Advice Service

John Griffith-Jones
John Griffith-Jones

The Financial Conduct Authority wants the Money Advice Service to undergo a value for money study for its annual business plan, above and beyond the current FSA review.

Speaking to the Treasury select committee today, FCA chairman John Griffith-Jones said it is having “robust” discussions with MAS over its budget for 2013/14.

He said: “We are, frankly, having a robust exchange of views about what they want to spend the money on, whether it is the right things.

“What we really need, and which we have the powers for, is a value for money study. It is one thing for us to review the business plan but if I do not like it and the chairman of MAS does like it then it rests uncomfortably in no mans’ land.

“I am fully aware about many people asking why MAS spends so much on its marketing budget.”

The MAS has been blasted for a “colossal” marketing spend and “excessive pay” for its senior staff.

When asked if the FCA has any powers to change or veto the MAS business plan if ii is not satisfactory, Griffith-Jones said his powers are not clear.

The FSA minutes from its annual meeting in April, published last month, show there was board level concern over MAS’ business plan last year. It led to the FSA introducing an extra scrutiny committee to cover the service.

Griffith-Jones said: “There is a much greater energy being put in this year to make sure we do not get to the same position and an awareness at my level and with FCA chief executive Martin Wheatley.

“If we are in danger of getting stuck then we will talk to the Treasury to say these arrangements are not satisfactory because we are having an argument, so what do you want us to do.”

He says a MAS chief executive to replace Tony Hobman has not been chosen but a salary has been decided and will be revealed shortly.