The chancellor will announce that the Money Advice Service (MAS) will be scrapped in a bid to save the Treasury money and balance the books, according to reports.
Chancellor George Osborne will announce he will scrap the MAS, which is in part funded by a levy paid by advisers, in his Budget speech today, the Financial Times reports.
The paper also laid out other expected announcements, including raising the personal tax allowance towards £12,500 and the higher rate threshold towards £50,000, plus £1.5 billion towards the government’s school academies scheme.
Last year an independent report commissioned by the Treasury called for dramatic changes to the MAS’s business model, and proposed the service cut its budget and workforce by half.
In March 2013 the Treasury commissioned an independent review of the controversial organisation after a report by MPs branded the MAS ‘not fit for purpose’.
In December 2015 MAS set out plans to cut costs by 7%, reducing total spending from £81.1 million in 2015/16 to £75.1 million in 2016/17.
MAS’s spending on marketing came into the spotlight in 2013 when it MPs pointed out it had spent £18 million of a £46.5 million budget on marketing.
The service’s marketing budget is due to fall by nearly £5 million, from £8.83 million in 2015/16 to £3.97 million in 2016/17.
However, the FT said it was claimed MAS had spent a total of £51 million on advertising and branding.
The report was followed by the results from the National Audit Office's review of MAS which found it had not achieved value for money with its provision of money advice.
MAS was all but excluded from delivering the government-backed retirement guidance service Pension Wise, with face to face session delivery given to Citizens Advice and phone consultations given to The Pensions Advisory Service. Instead MAS was to deliver online support.