Schedule 15 - The consumer financial education body

Financial Services Bill – in a Public Bill Committee at 3:15 pm on 15th March 2012.

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Amendment made: 111, page 270, line 37, schedule 15, leave out ‘to the Treasury’.—(Mr Hoban.)

Question proposed, That the schedule, as amended, be the Fifteenth schedule to the Bill.

Photo of Chris Leslie Chris Leslie Shadow Minister (Treasury)

The Minister is ready to shout his assent to the schedule even before he has heard my words— I might persuade him of some further concessions, cupcakes notwithstanding.

The creation of the Money Advice Service has been under the spotlight in recent months and in the past year. Essentially, schedule 15 provides the nuts and bolts of the arrangements for how that organisation will work in law. The Minister will know that concerns have been voiced about the nature of the strategy being pursued in the Money Advice Service. When we debated clause 5, we said that we wanted the consumer financial education bodies to give proper attention to the lower income groups in society—the most vulnerable and those in greatest need. We want the Money Advice Service to prioritise some of its work and activities to focus on their needs and concerns, rather than simply spreading all its efforts across all sections of society equally. Clearly there are individuals for whom money advice is necessary, but it will not perhaps be about bread and butter issues, whereas for others, small mistakes will add up to very significant and potentially detrimental impacts on their lives. We need the Money Advice Service to focus properly on the needs of those who most need advice. I want to press the Minister on that. What scope is there for ensuring that the Money Advice Service takes that attitude?

Does the Minister think that the Money Advice Service is pursuing the right strategy at the moment? It is putting much of its resource into web-based activities and not so much into face-to-face advice services. In recent months, there have been significant changes at the Money Advice Service—some significant redundancies—and it has seen a large expenditure shift to advertising and marketing as opposed to expert in-house money advice capability.

Photo of Yvonne Fovargue Yvonne Fovargue Opposition Whip (Commons)

Does my hon. Friend share my concern that by reviewing the delivery of debt advice, the Money Advice Service may be moving towards the delivery of such advice, particularly now that it is co-ordinating it? Given that there are agencies that have been delivering it very effectively for a considerable period, it is a concern.

Photo of Chris Leslie Chris Leslie Shadow Minister (Treasury)

Indeed, and my hon. Friend and the hon. Member for Solihull—I am amazed that I remembered who she represents, but it is a very important constituency—have raised that important point before. There are questions hanging over the strategy of the Money Advice Service, the answers to which need to be clarified.

I have had a couple of surprises from asking the Minister parliamentary questions about the Money Advice Service. I was surprised that the pay and remuneration of senior management is so very large and significant. I think that it is more than ironic that we have a money advice service with very significantly remunerated senior executives—there were bonuses of more than £100,000 on top of the salaries of the senior management team in 2010-11. What surprised me most was where the Money Advice Service sits in terms of its duty as a public body. He told me in one written answer that it is not subject to the Freedom of Information Act, because it is not classified as a public body in that way. I find that surprising. It should be in statue; it has very important  responsibilities, and if we do not have money education in the classroom, we are putting a lot of responsibilities on its shoulders.

Trying to find out what the Money Advice Service’s strategy is and how well it is working, it is clear that there is a lot of secrecy and obfuscation about what is happening and where it is going with its strategy. For example, it has a health check service, which is good in principle, but to what extent is it evaluated? Does the Minister concede that it should be a public body subject to the Freedom of Information Act? Will he act to ensure that we have proper scrutiny of how the management are proceeding in their strategy, that the strategy is opened to more scrutiny and, in particular, that we get the management focused on inclusivity?

Photo of Yvonne Fovargue Yvonne Fovargue Opposition Whip (Commons)

Does my hon. Friend share my concern that some of the debt advice strategy appears to be to see many more people—150% more—with the money available, which is a great aim, but it is lowering the level to gateway advice? In effect, it will be seeing more people, but advising less.

Photo of Chris Leslie Chris Leslie Shadow Minister (Treasury)

Indeed, and that focuses more on the quantity than the quality of advice. My hon. Friend makes an important point. It is covered in schedule 15. Those are my questions to the Minister.

Photo of Mark Hoban Mark Hoban The Financial Secretary to the Treasury

Let me be clear: the hon. Gentleman says that the Money Advice Service should be a public body, but the arrangements for setting up the service are set out in the Financial Services Act 2010. That was an Act introduced by the previous Government who set in place the governance arrangements.

There is an issue here. The Money Advice Service needs to think about how it uses its budget best. It needs to reach as many people as possible. Let us leave debt advice to one side. My concern is that if it just focuses on face-to-face advice, it would not get the reach it needs. What it recognises in its model is that there are three channels: web, telephone and face-to-face. As part of its broader money advice responsibilities it commissions face-to-face advice. That is an important part of it. We need to make sure that as many people as possible have access to its information; have access to things like the financial health check; are able to use the comparison tables for ISAs; and are able to use comparison tables for annuities. There needs to be a significant content on its website but people need to know it is there.

We have spent a lot of time over the course of the last few weeks talking about how people need to be aware of free services that are available and bemoaning the advertising that claims management companies do on daytime television. The reason why claims management companies are at the front of people’s minds is because they advertise. If we want people to access the Money Advice Service’s website, they need to know it is there. We need to find ways of promoting it to people so that they visit it. The worst thing in the world is to have a beautifully produced website with no visitors. It needs to drive traffic to its website and that requires a degree of promotion.

The Money Advice Service introduced its future plans for debt advice, under the slogan “A new approach to debt advice: a better deal for everyone”, on its website  on 22 February 2012. It will publish its business plan on debt advice at the end of this month. Its intention is clear. It is a commissioner, not a provider, particularly when it comes to face-to-face debt advice. There are lots of other services there. It is ensuring that the financial services firms, rather than taxpayers, pay for the debt advice and that there are people there to provide that advice.

We have spent some time talking about the Money Advice Service. It is important that it gets its message across. It is an independent body. It is funded by a levy on the financial services industry and the Financial Services Authority is responsible for approving its business plan. In schedule 15 we have ensured that it falls under the remit of the National Audit Office and it will be audited by the Comptroller and Auditor General. I think that will help to reassure people that the money it uses, which comes from the private sector, is properly spent.

Question put and agreed to.

Schedule 15, as amended,accordingly agreed to.

Clause 43 ordered to stand part of the Bill.