It said the MAS had a rocky start in 2011 but that the work it did soon after had helped it to move “in the right direction” to better target consumers.
It also found the service was set to further benefit from the launch of its UK Financial Capability Strategy, to be published in 2014, which will allow it to influence long-term financial behaviour change in consumers, it said.
The findings stood in stark contrast to a report by the Treasury Committee published earlier this week, which suggested there were widespread failings in the MAS’ business model and concluded it was not “fit for purpose”.
However, representatives for the MAS, which has an £81m budget for 2012-2013, pointed out the Committee report had been conducted mostly during an earlier period in its life and therefore had not taken into consideration changes it had made in the interim.
The NAO’s report, which focused on its plans and strategy for 2013-2014, found: “After two years of providing insufficiently targeted advice, the service has now reached a phase in its strategy in which it is developing more targeted advice provision. From April 2011 to March 2013, the Service’s advice provision has not been sufficiently targeted to those most in need.
“However, work completed in 2012-20 13 to focus advice towards consumers achieving specific outcomes is only now enabling the service to provide more targeted advice.”
“The launch of the UK Financial Capability Strategy, to be published in 2014, also means the service will be better placed to influence the money advice sector to bring about long-term behaviour change.”
Some financial advisers, who help fund the MAS, do not believe the service offers much of a benefit to the public and argue its name and marketing activities blur the definition of ‘advice’.
The NAO found the MAS had been forced to start providing ‘money advice’ before it had the chance to analyse the need for it.
It said: “The service is only now moving in the right direction to allow it to add more value in providing an important service. It has not yet shown that it is achieving value for money as it has not to date sufficiently targeted its interventions to those who need it most. It is now moving in the right direction by developing a more specific and targeted provision.”
It also found the MAS was delivering value for money on its debt advice. “The number of advice sessions has increased, the unit costs have fallen, and the quality standards of advice have been continuously improving since our last examination in 2010,” it said.
However, it said it had mixed views over whether the MAS’ ‘digital first’ strategy had met consumers’ needs.
It said that following the service’s £18m marketing campaign, visits to the website had increased by 400%, while customer satisfaction had increased and more people were using a tool on the website. However, the time consumers were spending on the site had dropped over this period and 50% of consumers leave the website after visiting only one page.
The NAO also criticised the MAS for not adapting its site to mobile users. “Despite the fact that more than half the adult population now use a mobile phone to access the internet, the service has not yet completed the development of a mobile platform,” it found.
The NAO said the MAS had yet to implement a consistent measure of website engagement to be reported back to the board and implement an overall evaluation programme to be able to “give evidence for the service to allocate resources, and inform the organisation’s direction”.
Money Advice Service chief executive Caroline Rookes said she was pleased with the NAO’s findings but was aware the MAS could not afford to be complacent.
She said:”We are very pleased that the National Audit Office has found that our debt advice work is delivering value for money…we also welcome the NAO’s finding that our money advice work is moving in the right direction.
“But we’re not complacent. We are working hard to develop meaningful relationships with the advice community and to enhance the way we evaluate our progress, but there is more we can do.
“The NAO has provided us with helpful recommendations on how we might go about doing that. We look forward to working through the recommendations in the months ahead and using them to further improve our service, and as a result, provide long-lasting help to our customers.”
The NAO’s five recommendations for the MAS were: to ensure that debt advice standards are maintained, to develop an understanding of the risks to different consumers associated with the MAS’ outcome measures, develop its role to become more of an influencer of other organisations that provide money advice, to continue to build relationships with regulated financial advisers who can provide advice on regulated financial products that fall outside the remit of the MAS, and to create a coherent evaluation strategy.
The NAO’s findings came after the TC discovered “serious problems” during its year-long review into the MAS, published on Monday.
The TC questioned the validity of the service altogether after it found that the MAS had spent too much money on marketing to little effect and was doing little more than copying other similar services.
It called for an urgent independent review to be carried out into the service to determine whether there was a place for the MAS in the market and how it could change to achieve its objectives.
The TC specifically asked for the review to be independent for fear that the government had already decided the service should continue in its current form.
The MAS was set up in 2010 in response to a government commissioned review into consumer financial capability, which estimated that 19m people in the UK would benefit from generic financial advice.
The MAS was initially given two main objectives – to enhance the public’s understanding and knowledge about financial matters and its ability to manage their own financial affairs. In 2012 it took on the additional responsibility of providing free face-to-face debt advice and coordinating the debt advice sector.
Its budget for 2012-2013, which was funded by a levy on the financial services industry, was £80.8m, £34.5m of which was allocated to debt advice.