Government to merge and simplify money services
THE Government are to create a new financial advisory service, after having arranged for the closing of the Money Advice Service (MAS) in the March budget.
The as of yet unnamed body will also replace the Pensions Advisory Service (TPAS) and Pension Wise, merging the three outgoing services into a single unit.
The Government believe this will make the financial guidance available to the public more efficient.
However, while economic "efficiency" may be the result of collapsing three bodies into one, it's likely that such a unification may end up simply providing the Government with the chance to cut back on spending.
And even if the efficiency isn't merely about saving public money, there isn't any indication of how exactly the new service will escape one of the major difficulties faced by the three services it will replace: actually reaching those who need help.
This was the major criticism levelled at the MAS, which was repeatedly maligned for its failure to engage the public.
It was said to have relied far too much on its website for communicating with people, many of whom stayed on this website only for a matter of seconds.
Another criticism was that it offered information and services already available via charities, with the public more likely to go to such charities than to the MAS.
Because of this under-subscription to its service, it was also denounced for spending too much on its website and on the salaries of its executives.
It was also censured for spending too much on advertising campaigns, even if the one in 2013 reportedly increased traffic on its website by 400%.
Combined together, these perceived failings led to reports by the National Audit Office and by pensions-expert Christine Farnish, who recommended [PDF] that the MAS should, among other things, "minimise spend on marketing activity".
As a result, the then-Chancellor George Osborne announced the abolition of the service in his March 2016 budget.
In addition, he also announced that Pension Wise and TPAS would be combined into a single body dispensing pension-focused guidance.
However, with the Government's most recent announcement, there will no longer be a separate body for pensions guidance and a separate body for general money and debt advice.
Instead, these two bodies will be fused into one, which the Government believe "would be better able to respond to the different financial guidance needs of consumers".
At the present moment in time, it's not clear how exactly such a service will work.
Neither is it clear how it will distinguish itself from its predecessors, particularly when it comes to connecting with the 46% of people who, according to the Farnish report, hadn't heard of MAS in November 2014.
Including Farnish herself, there are some who'd like it to do more to help, not just people suffering debt problems, but people at various key stages of their lives.
In other words, they want the new service to make guidance available to people who, for instance, are looking to buy their first home or are having their first child.
Given that there were roughly 310,000 first-time buyers and 697,852 births last year, this will expand the scope and responsibilities of the new service considerably.
But given that one of its main objectives will be efficiency, it's hard to see how exactly a need to be more efficient and streamlined will sit with a need to accommodate a greater number of people.
In fact, since the Government have reduced three organisations into a single body, it's unlikely that they'll expand on the services offered by any or each of them.
Also, when taking account of the fact that MAS had been criticised by MPs for not doing enough to help those in "crisis" during the recession, it's not especially likely that the new service will become more general and thinly spread in the coverage of its guidance.
Instead, it will most probably focus on what it'd been praised in the Farnish for report for doing well: offering debt guidance to those who most needed it, as well as arranging for those in financial trouble to make contact with specific debt services.
Much the same is likely to be the case for Pension Wise and TPAS. Instead of expanding their respective remits, the new service will concentrate on their main tasks.
In the case of TPAS, this is to "get the answers you need or identify the people you need to speak to" when trying to make a decision on your pension.
As such, there's little sense that the new body will have the resources or authorisation to do much more than its predecessors with regards to engaging a greater range of people.
This is a shame, because a long series of surveys and studies have shown that the current financial climate often leaves people feeling confused and vulnerable.
They need more help, not less, and yet the Government may potentially withdraw the assistance previously available to them in the name of efficiency.