The service that is supposed to help those experiencing financial problems is "not fit for purpose", according to MPs.
In a hard-hitting report into the Money Advice Service (MAS) published today, the Treasury Select Committee said it had wanted to scrap the service completely but had been persuaded to grant a stay of execution because the Treasury has already announced an investigation.
The report condemns the "excessive pay" of senior staff and the amount of cash used to promote the service rather than help vulnerable people. The committee has called for an urgent review into the service, which has an annual budget for 2013-14 of £80m.
In a telling sign of the importance of the issue, it has demanded the review must be completed "no later than summer 2014".
The damning report criticised the "very large amounts spent on marketing" by the Government agency, which was set up to help people needing debt and financial guidance.
It splashed out about £20m on communications and marketing in 2012-13, including some high-profile TV advertising.
However, critics said the predominantly web-based service failed to help people, many of whom needed face-to-face advice.
The MPs also said that the pay of the former chief of the service, Tom Hobman, was "excessive" and had undermined "the credibility of the organisation".
Mr Hobman pocketed £350,000 a year before resigning in July 2012. This was around twice as much as he had received at his previous role as chief executive of the pensions regulator.
The committee expressed surprise "that the head of a comparatively small organisation should receive a salary £100,000 in excess of the Prime Minister". His salary was also almost twice as much as the Permanent Secretary of the Treasury, the government department with responsibility for the MAS. Mr Hobman was replaced as chief executive by Caroline Rookes in February 2013 at a far lower salary of £140,000.
Ms Rookes said: "The committee's findings are largely based on evidence taken well over a year ago. Since then, we have appointed a new chairman and chief executive, and changed the direction of the organisation to focus much more on working with partners to help customers."
The Treasury committee also asked whether the Financial Conduct Authority should take responsibility for the objectives of the MAS.
An FCA spokesman said: "We'll be discussing the select committee's findings with MAS and the Treasury to agree what further steps should be taken."
The service has also come under criticism for failing to give people proper financial advice.
Karen Barrett, the chief executive at unbiased.co.uk, said: "There is a very important role that the Money Advice Service cannot fulfil – that of a qualified, financial adviser, someone who can review an consumer's financial circumstances, ask questions about goals and objectives and tailor a financial solution to the individual needs."
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