At an evidence hearing for the Joint Committee on the Draft Financial Services Bill yesterday, Lord McFall quizzed Hoban over high pay levels at the service at a time when it is on the verge of almost halving its staff from 150.
McFall said: “Here is a body looking for financial inclusion and you’ve got a chief executive on £350,000, twice the Prime Minister, for a staff in the New Year of 77.
“I’m informed three directors have been appointed in the last eight or nine months on six figure salaries as well.
“Given there is a gap in the market, particularly after RDR, is there not a case for you getting the NAO [National Audit Office] to look at the value for money element to ensure this organisation is fit to give people financial advice and ensure the objectives are satisfied?”
Hoban said it was already the view of management that the organisation “as currently structured doesn’t deliver its objectives”.
He also highlighted the powers of the NAO over the regulators under the proposed regime.
The Treasury secretary said he was a “great supporter” of MAS.
“I think it’s absolutely vital if we are to engage consumers much more with budgeting, getting to know their financial needs, finding the products to meet those needs, ” Hoban said.
But he said the service must think about “how it maximises its reach” and engage with as many people as possible.
During the session, Hoban also repeated his commitment to the early publication of warning notices under the new regulatory regime.
“I’m very keen to see the powers that are in the bill around the publication of warning notices. It’s right that consumers should know if someone’s got to that point in the enforcement process.”
