The government announced on Saturday (12 February) that it has found £27 million to continue funding face-to-face debt advice in Citizens Advice Bureaux and other charitable advice centres. The cash will pay for another year of the services, which were under threat of closure due to the end of the Financial Inclusion Fund, which had been confirmed three weeks ago.
Announcing the new funding, the Secretary of State for Business Vince Cable said: 'It's vitally important that everyone has access to free debt advice, and I am pleased to announce that the Department for Business will provide the £27 million necessary to maintain the programme of face-to-face debt advice.'
Vince Cable deserves praise for his role in securing this reprieve for debt advice. He is a strong supporter of Citizens Advice Bureaux and was named Citizens Advice Parliamentarian of the Year in 2008. It would have been an embarrassment for him if 500 debt advisers plus support staff funded by his department had been made redundant on his watch.
LAG welcomes this news, but points out that next year legal aid funding for debt advice in many cases will end. This has bought the coalition some respite, but it really needs to consider an integrated strategy for debt advice across government. We would also ask is it not time that the credit industry, especially banks, started paying for debt advice?
Showing posts with label debt. Show all posts
Showing posts with label debt. Show all posts
Sunday, 13 February 2011
Friday, 16 April 2010
Debt advice strategy 'deficient'
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
Monday, 27 April 2009
Reports from the audit trail … Number 2
Until January, Tracy and her husband Melvyn lived with their five kids at their family home near Derby. The home was repossessed that month on two weeks’ notice and the family offered emergency housing by the council to avoid them becoming homeless. Instead, friends stepped in. ‘At that time I was a wreck. I couldn’t cope with crowds and I didn’t want to go out. My safe haven had been taken away,’ Tracy recalls.
Tracy and Melvyn, together with their three youngest, stayed at a neighbours’ house. ‘We slept on the floor and the three boys shared a double bed with his son,’ she says. Her two eldest kids were accommodated elsewhere, one with Tracy’s sister and the other with a close friend.
I met Tracy at Derbyshire Housing Aid in March where adviser, Gavin Isham, had been sorting her family’s debt and housing problems over the last few months. ‘We came down here to get some advice and soon realised that we were going to lose the house,’ Tracy relates. ‘There was no way out of it. We’d struggled for two years on our own.’ The family’s financial problems began when her husband lost his job a couple of years ago. They were eventually forced out of their home after a lender who provided a consolidation loan of £30,000 pursued possession proceedings. Up until that point they hadn’t defaulted on their mortgage.
When Tracy comes into Derbyshire Housing Aid she has good news. The family has been given a four-bedroom council house. ‘Getting rehoused was a complete nightmare. If it hadn’t been for Gavin I don’t know what we would have done,’ she says. ‘You have to bid for your home – meanwhile my family were living all over the place.’ The lawyer also represented them in court.
Derbyshire Housing Aid is part of the Derby CLAC, or Community Legal Advice Centre. The new service, which won the tender in a straight competition with the Sheffield-based company A4e, has 38 paid staff and comprises Derby Citizens Advice and Law Centre, Derbyshire Housing Aid as well as two solicitors’ firms, the Smith Partnership and Moody & Woolley. Some 7,522 people have come to the CLAC in its first nine months and 82 per cent come from ‘priority groups’ – in other words, the unemployed, low income, black and minority ethnic groups, victims of violence etc ….
Derby CLAC is feeling the full impact of the so-called credit crunch. Under its contract with the Legal Services Commission, it is required to see clients needing specialist advice within two weeks. However, such is demand, the queue for debt work has stretched to four weeks. At Derbyshire Housing Aid, which runs the duty scheme at the local county court, four out of ten clients face possession orders. It reckons that in a three-month period ending in January, some 390 people were at risking of losing their homes. It is a 78 per cent increase on the previous year.
Chris Pass, Derby CLAC’s manager, reckons that this new-style CLAC has been well received. ‘People seem to like the fact that everything is in one place,’ he says. ‘We get a lot of people with multiple problems. If you have employment problems and you have been made redundant, then you are going to potentially have debt problems, housing problems etc. Hopefully by capturing things a bit earlier we can actually alleviate problems more quickly.’
It’s a sentiment echoed by Jude Simmons, head of community work at Community Links when I visit a couple of weeks later. Community Links is an innovative charity in Newham, East London, and in many ways is a proto-CLAC offering a wide range of advice services (although it doesn’t have employment or family contracts). ‘People don’t come to us and say that they have a letter from their creditors saying they owe them £8,000 - can we sort it out?,’ reckons Jude Simmons. ‘Often we cannot understand what they are talking about when they first come in. They don’t speak English, have mental health problems and nearly always lead really chaotic lives.’ Nearly always? ‘Yes, nearly always,’ she says.
In 2008 some 17,000 came to Community Links for help. As Simmons puts it, there is ‘a huge churn of people’ in an area where some 106 different languages are spoken. Newham is the ‘first port of call’ for many, Simmons says. ‘As soon as people make anything of themselves they move out further down the railway track to Barking and Dagenham and further away.’
How are these two very different services coping with fixed fees? Chris Pass reports that the jury is out. For example, he explains that in welfare rights, where the fixed fee is about £220 per case, the average case runs at about £180. But there are ongoing cases which are ‘basically running to about £400 … not that many but they pull the average to £220 or higher’.
In other words, there’s not much, if any, margin for comfort. Unsurprisingly, for Community Links, with its demanding clientele, the introduction of fixed fees creates a difficult business model. It is hard to make them work, explains Simmons, because ‘if we used to get paid £58 an hour and now we’re getting paid £200 a case, cases should be running at about three and a half hours. Often we haven’t really unravelled what clients want at that stage because they don’t even know what their problem is.’
But as Simmons says: ‘We have to make this work though because there are 40 people queuing outside every day. If we do not help them nobody else can.’ By the time I arrived at Community Links at 8.30am last month a long line of prospective clients was already there. Community Links reckons that eight out of ten people that wait outside are eligible for legal aid. However half won’t have the correct paper work and so have to queue again.
Last autumn students conducted a research project interviewing those waiting. The results were surprising. Apparently, people didn’t complain about the length of the wait, or having to suffer the cold outside or even the lack of privacy in giving personal details at a crowded reception. ‘They wanted magazines, toys for the children, and space for the buggies,’ reports Simmons. ‘People are in such need that they are prepared to wait all day.’
Tracy and Melvyn, together with their three youngest, stayed at a neighbours’ house. ‘We slept on the floor and the three boys shared a double bed with his son,’ she says. Her two eldest kids were accommodated elsewhere, one with Tracy’s sister and the other with a close friend.
I met Tracy at Derbyshire Housing Aid in March where adviser, Gavin Isham, had been sorting her family’s debt and housing problems over the last few months. ‘We came down here to get some advice and soon realised that we were going to lose the house,’ Tracy relates. ‘There was no way out of it. We’d struggled for two years on our own.’ The family’s financial problems began when her husband lost his job a couple of years ago. They were eventually forced out of their home after a lender who provided a consolidation loan of £30,000 pursued possession proceedings. Up until that point they hadn’t defaulted on their mortgage.
When Tracy comes into Derbyshire Housing Aid she has good news. The family has been given a four-bedroom council house. ‘Getting rehoused was a complete nightmare. If it hadn’t been for Gavin I don’t know what we would have done,’ she says. ‘You have to bid for your home – meanwhile my family were living all over the place.’ The lawyer also represented them in court.
Derbyshire Housing Aid is part of the Derby CLAC, or Community Legal Advice Centre. The new service, which won the tender in a straight competition with the Sheffield-based company A4e, has 38 paid staff and comprises Derby Citizens Advice and Law Centre, Derbyshire Housing Aid as well as two solicitors’ firms, the Smith Partnership and Moody & Woolley. Some 7,522 people have come to the CLAC in its first nine months and 82 per cent come from ‘priority groups’ – in other words, the unemployed, low income, black and minority ethnic groups, victims of violence etc ….
Derby CLAC is feeling the full impact of the so-called credit crunch. Under its contract with the Legal Services Commission, it is required to see clients needing specialist advice within two weeks. However, such is demand, the queue for debt work has stretched to four weeks. At Derbyshire Housing Aid, which runs the duty scheme at the local county court, four out of ten clients face possession orders. It reckons that in a three-month period ending in January, some 390 people were at risking of losing their homes. It is a 78 per cent increase on the previous year.
Chris Pass, Derby CLAC’s manager, reckons that this new-style CLAC has been well received. ‘People seem to like the fact that everything is in one place,’ he says. ‘We get a lot of people with multiple problems. If you have employment problems and you have been made redundant, then you are going to potentially have debt problems, housing problems etc. Hopefully by capturing things a bit earlier we can actually alleviate problems more quickly.’
It’s a sentiment echoed by Jude Simmons, head of community work at Community Links when I visit a couple of weeks later. Community Links is an innovative charity in Newham, East London, and in many ways is a proto-CLAC offering a wide range of advice services (although it doesn’t have employment or family contracts). ‘People don’t come to us and say that they have a letter from their creditors saying they owe them £8,000 - can we sort it out?,’ reckons Jude Simmons. ‘Often we cannot understand what they are talking about when they first come in. They don’t speak English, have mental health problems and nearly always lead really chaotic lives.’ Nearly always? ‘Yes, nearly always,’ she says.
In 2008 some 17,000 came to Community Links for help. As Simmons puts it, there is ‘a huge churn of people’ in an area where some 106 different languages are spoken. Newham is the ‘first port of call’ for many, Simmons says. ‘As soon as people make anything of themselves they move out further down the railway track to Barking and Dagenham and further away.’
How are these two very different services coping with fixed fees? Chris Pass reports that the jury is out. For example, he explains that in welfare rights, where the fixed fee is about £220 per case, the average case runs at about £180. But there are ongoing cases which are ‘basically running to about £400 … not that many but they pull the average to £220 or higher’.
In other words, there’s not much, if any, margin for comfort. Unsurprisingly, for Community Links, with its demanding clientele, the introduction of fixed fees creates a difficult business model. It is hard to make them work, explains Simmons, because ‘if we used to get paid £58 an hour and now we’re getting paid £200 a case, cases should be running at about three and a half hours. Often we haven’t really unravelled what clients want at that stage because they don’t even know what their problem is.’
But as Simmons says: ‘We have to make this work though because there are 40 people queuing outside every day. If we do not help them nobody else can.’ By the time I arrived at Community Links at 8.30am last month a long line of prospective clients was already there. Community Links reckons that eight out of ten people that wait outside are eligible for legal aid. However half won’t have the correct paper work and so have to queue again.
Last autumn students conducted a research project interviewing those waiting. The results were surprising. Apparently, people didn’t complain about the length of the wait, or having to suffer the cold outside or even the lack of privacy in giving personal details at a crowded reception. ‘They wanted magazines, toys for the children, and space for the buggies,’ reports Simmons. ‘People are in such need that they are prepared to wait all day.’
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