Another Brick in the Wall

Something that caught my attention in the recent Queen’s speech was the Government’s intention to set up a new financial education agency to be funded by the banks.

I’m a big believer in financial education - I wouldn’t have spent the best part of 18 months building this site if I wasn’t! But I’m rather sceptical that government initiatives on this front will actually succeed.

If this new agency does end up seeing the light of day, which is questionable given the lack of time to pass bills in the House of Commons before the general election, I fear it might turn out something like this...

The Government, not really understanding personal finance and being rather busy anyway will delegate the task of setting up the agency to some highly paid senior civil servants.

The highly paid civil servants, themselves not very clued up on personal finance matters, will have a series of ‘strategic’ meetings then pat themselves on the back for deciding to call in a team of very expensive private sector management consultants to help out.

The very expensive management consultants don’t understand very much about personal finance either, but they like ‘strategic’ meetings and talk a good game so the civil servants are happy.

The banks, who are indirectly footing the bill for all this, are getting a bit worried. They understand enough about personal finance to know that the better the public understands it, the harder it’ll be for them to pull their very profitable wool over public's eyes. Fearing shrinking bonuses, they insist on being involved ‘for the good of the project’ with the intention of protecting their own interests. The big insurers will also be pretty keen to do the same.

Meanwhile, the civil servants and management consultants are too busy having meetings to actually get any work done, so they employ lots more civil servants and expensive consultants to do it for them.

Many months and millions of pounds later, the agency proudly launches a glossy website and series of brochures covering a few basics of the personal finance world. It’s not bad, but it’s not that good either. And, because of the banks’ influence, it doesn’t expose many tricks of the trade or really help consumers that much.

I hope I’m wrong, but I don’t expect to be.