Funding for the Money Advice Service (MAS) will almost double to £86.8m for 2012/13 if proposals released today by the Financial Services Authority (FSA) are enacted.
The figure was reached after the government agreed to allocate responsibility for debt advice to the MAS in July 2011.
Of this figure, £27m will be made available purely for the delivery of face to face debt advice for 2012/13.
The FSA is also consulting on whether it should allocate debt advice costs into “fee blocks”.
This would mean £40.5m of debt advice funds being split into blocks, with £6.1m allocated to a separate debt advice function for firms which also provide unsecured lending.
Firms which provide secured lending will receive £34.4m to provide debt advice, a 3440% increase on the £1m the MAS allocated to it last year.
The FSA, which oversees the MAS, has also proposed raising its annual costs to £578.4m for 2012/13, a leap of almost 16% on the 2011/12 figure of £500.5m.
The City regulator said the costs were likely to be the last annual funding requirement requested by the FSA before it splits into the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), in 2013.
Hector Sants, FSA chief executive, said: “We are mindful of any increase in costs to industry and have continued to maintain headcount and keep core operating costs in line with inflation.
“Nevertheless the AFR is still rising as we implement the government’s regulatory reform programme and invest in the necessary long term IT infrastructure. The increases will be borne mainly by larger and more complex groups. We have, however, minimised the impact on smaller firms by keeping the minimum fee at £1,000 for the third year running.”
The FSA’s full consultation document on regulated fees and levies can be viewed at: http://www.fsa.gov.uk/library/policy/cp/2012/12-03.shtml
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