The Treasury-commissioned review has suggested cutting the MAS’s full-time staff from 130 to around 50 and its £81.1m budget to between £50m and £65m, according to a draft copy seen by The Telegraph.
The review, by former National Association of Pension Funds chief Christine Farnish, pointed out that the service had “an important job”, but suggested many of the financial services it offered are covered adequately by other organisations and websites.
The report suggested it should be the division which dealt with mortgages, savings and other matters – rather than the proposition that dealt with debts – that should bear the brunt of the cuts.
“There is a high degree of duplication between the MAS and other websites which offer content on financial issues,” the report said according to the paper.
“We question whether a body like MAS … should even seek to compete with the wide range of other bodies which already have trusted brands and extensive consumer reach. It still has an important job to do but change is needed.”
In May, the Treasury announced there would be an independent review into MAS following concerns – and in some instances scathing criticism – of its role, reach and effectiveness. In December 2013, the chairman of the Treasury Committee George Mudie said: “The Money Advice Service is not currently fit for purpose.”
However, a National Audit Office report published about the same time took a more lenient view, saying the MAS was “moving in the right direction” and was already providing valuable debt advice.
The Farnish review has been tasked with assessing the need for consumer education and advice on financial matters, particularly in the wake of the Budget pension freedoms, and to examine whether MAS is capable of serving that need.
MAS chief executive Caroline Rookes has staunchly defended the organisation.
It was due to report back by the end of the year.
