It was always on the cards that consumer protection watchdogs would not be immune from the recently announced bonfire of the quangos. But what was the extent of the surgery and what will be the implications for advertisers and marketers? Stephen Groom inspects the damage.
Topic: Consumer protection
Who: HM Government, Office of Fair Trading, Financial Services Authority, Food Standards Agency, Consumer Direct and Consumer Focus
Where: UK
When: May-October 2010
Law stated as at: 1 November 2010
What happened:
After taking power, Her Majesty's cash-strapped Coalition Government's cost-cutting axe soon ripped into a number of publicly-funded bodies.
First up was the Financial Services Authority. In June 2010 Chancellor George Osborne announced its abolition, with its consumer protection and advertising regulatory function to be hived off into a separate Consumer Protection and Markets Authority.
Few tears will probably be shed by those at the sharp end of the FSA's financial promotions control regime.
Its hallmarks might be said to have been flip-flopping between unwieldy "handbooks" of voluminous advertising rules and over simplified "principles-based" controls, excessive coyness in refusing to name and shame erring advertisers in regular case reports and sheer pig-headedness in refusing to offer any form of copy advice service to allcomers other than "consult your lawyer".
It remains to be seen, however, whether the body that takes over this role will be a breath of fresh air or more of the stale old same, with the Advertising Standards Authority mopping up more and more of the ad complaint processing in this sector.
Food standards body next up for oblivion
Next to have its collar fingered was bizarrely a body with exactly the same initials, the Food Standards Agency. The FSA's site tells us that it is "an independent Government department set up by an Act of Parliament in 2000 to protect the public's health and consumer interests in relation to food."
A substantial section of the FSA site sets out its "Strategy for 2010-2015." Wishful thinking perhaps as in July 2010, Health Minister Andrew Lansley announced its total abolition.
Beneficiaries of the move, which will theoretically see the loss of 2000 jobs and a saving of £135m a year, would be DEFRA, assuming the FSA's regulatory role in for example safety and hygiene, and the Department of Health, picking up the nutrition, diet and public health brief.
Some said the FSA's days were numbered from the moment it appeared to have lost the long running battle with industry over traffic light food labelling, a loss finally sealed by the European Parliament's recent decision to drop the idea in favour of a rival system favoured by the likes of Kraft, Danone and and Nestle.
Three more in Coalition's sights
In October 2010 the next victims were the Office of Fair Trading, Consumer Direct and Consumer Focus. The ministerial announcement seemed to consign all three to the scrapheap.
Consumer Focus was set up by the Consumers, Estate Agents and Redress Act 2007 to represent consumers and challenge utilities and other businesses in response to consumer complaints about charges or services.
On the face of it, the £6m a year body seemed to represent reasonable value for money. Its CEO Mike O'Connor reported recently that in September 2010 it won a return for consumers of over £70m from energy companies and in June 2010, following a super complaint, it changed the ISA rules so savers will get an extra £15m a year. This evidently cut no ice with George.
Consumer Direct was launched in 2004 and is a telephone and online service offering information and advice on consumer issues. It is funded by the Office of Fair Trading and delivered in partnership with Local Authority Trading Standards Services. Its website is bold and colourful.
The roles of these organisations will apparently be largely taken over by Citizens' Advice Bureaux.
The Office of Fair Trading will not be scrapped as such, but will be merged with the Competition Commission to form a single competition and market authority. Its consumer protection and enforcement functions are to be transferred to "another body."
Whether this will be the same body as will be taking over the Financial Services Authority's consumer protection role, the Consumer Protection and Markets Authority, remains to be seen.
Why this matters:
So far, little seems to have changed on the ground with all the bodies affected still apparently functioning as normal. Also, when the time does come for change, there will inevitably be a wholesale reshuffling of personnel, with many existing functionaries popping up in bodies with different names performing pretty much exactly the same function.
Once the dust settles, however, there can be little doubt that the ranks of those championing consumer interests against big business will be distinctly thinner with CABs and Trading Standards unlikely to have the resources to fill the gap more than very partially.
On the other hand advertisers may feel that the medium term prospects for those willing to take risks in their marketing communications have got distinctly brighter. Whether this feeling will turn out to be fully justified remains to be seen.
