A report critical of the government’s strategy for debt advice has been published by the House of Commons Public Accounts Committee. A total of £600m will have been spent on the strategy between 2004 and 2011, but
The Department for Business, Innovation and Skills: Helping over-indebted consumers (thirty-first report of session 2009-10) argues that it lacks co-ordination and effective evaluation.
Around 11 per cent of the UK population struggles with debt problems says the report, which was published on 8 April. Responsibility for managing the 51 different initiatives to help these people is split across three government departments - the Department for Business, Innovation and Skills (DBIS), the Department for Work and Pensions and the Ministry of Justice. The DBIS is supposed to lead the strategy, but has not produced an annual report on it since 2007. Due to various problems the individual departments have been left to evaluate their own programmes and so comparisons on costs and effectiveness between the different programmes are difficult to make.
While the report recognises the success of the face-to-face advice services funded by the DBIS, it argues that this is the most expensive form of provision and is concerned about the variation in costs between different providers. These range from £201 to £377 per client. The report observes that two-thirds of debt management plans are arranged by private sector providers and argues that the quality and capacity of these services needs to be evaluated.
Looking to the future, the grants for face-to-face services funded by the DBIS are due to end in March 2011. Further funds will depend on the government being able to find the cash from its overstretched budget. This report seems to hint that more services could be provided by the private sector and that telephone and internet services might be a more cost-effective way of providing debt advice. LAG would argue that this is true to a point, but the report acknowledges that demand is increasing for debt advice services. A high proportion of this and ongoing demand will be led by client groups, such as people without cheap internet access, who are best served by face-to-face advice.
With such tight public finances, LAG believes that funding for advice services will be subject to even greater scrutiny from government and this will be accompanied by a desire to join up different funding streams to avoid real or perceived duplication. Advice providers and their various umbrella organisations will need to respond to this by putting aside some of their traditional rivalries to work closer together in the planning and delivery of services.
Picture: UK Parliament website
