The Trust’s director of external affairs Jane Tully reflects on the Wyman Review of debt advice funding.
After an eventful 2017, it is already clear that 2018 will prove to be a truly pivotal year for the future of debt advice.
The Bill creating the new Single Financial Guidance Body (SFGB) is completing its passage through Parliament, the Treasury is forming its plans for breathing space and the Money Advice Service (MAS) are implementing their commissioning strategy.
Added to this, we now have the recommendations from Peter Wyman’s Independent Review of the Funding of Debt Advice to chew over. The review explores the Government’s support offer for people in financial difficulty, covering long-standing questions including ‘who’ should pay for advice and ‘how’ free-to client advice should be funded.
While not everyone might agree with its contents – and it goes far wider than just these two questions – it has certainly given us lots of food for thought. Here’s a quick round up, and some early thoughts…
Director of external affairs Jane Tully blogs on the Trust’s response to the Treasury’s call for evidence on breathing space and statutory debt repayment plans.
This week we turned in our submission to the Treasury’s call for evidence on breathing space – a subject our policy manager Meg van Rooyen has written about on this blog previously, having been closely involved in developing this idea with colleagues in the advice sector over the last few years.
As an idea, breathing space has been a long time coming, and we have been pleased to engage with the Treasury over the last few months as they continue to develop the scheme. Here is a quick tour of some of the main points we have made.
Two schemes, not one
While the two elements that the Treasury are consulting on – breathing space and statutory debt repayment plans – are closely interlinked, it is important that we consider the effectiveness of each in isolation, and that the two elements are not seen as ‘one scheme’.
Jane Tully, the Trust’s director of external affairs, reflects on a busy year for the debt advice sector.
It has been quite some year for those of us working in debt advice – with debt hitting the headlines in a way not seen since the financial crisis, and services under pressure. If you’ve found it hard to keep track (like the rest of us!), here’s a round-up some of the key developments over the past 12 months….
1. Personal debt is back in the news…
Mark Carney started the year by cautioning that the Bank of England would be ‘keeping a close eye on consumer spending’. By July, officials were insisting that banks hold more capital and warning of a ‘spiral of complacency’. Come September lending was positively ‘frothy’(!), with consumer credit noted as a ‘pocket of risk’. A quick glance at the trend-lines and it’s easy to spot the concern – rising inflation, sluggish wage growth despite record low unemployment and soaring consumer credit – now more than £204 billlion – were making people nervous. Then came the first interest rates rise for 10 years. While it wasn’t a surprise, it will have challenged people on tight margins.
2. …and in Westminster…
Meanwhile, over in Westminster, THAT election and the ensuing fallout brought ample opportunity to politicise debt. First, the newly appointed Treasury Select Committee got in on the act by announcing a review into Household Debt. Then the emboldened opposition – spearheaded by John McDonnell – announced a radical policy on capping credit card debts. Along the way there were a few skirmishes in the House of Lords on breathing space – and as if that isn’t enough, there’s a possible National Audit Office (NAO) review and Public Accounts Committee scrutiny – in the offing. The House of Lords Financial Exclusion Committee moved on this important agenda, too, securing a new Financial Inclusion Policy Forum from the government in response. We’ll be watching to see what action flows from this.
The Trust’s director of external affairs Jane Tully has a first look at the Treasury’s call for evidence on a new ‘breathing space’ scheme for people in debt.
It was a busy day in the world of debt advice yesterday – with a long-awaited Treasury announcement on ‘breathing space’ and the Financial Guidance & Claims Bill returning to the Lords for its Report stage.
Progress on ‘breathing space’ follows pressure form Peers on the government to deliver its 2017 manifesto commitment to implement such a scheme after a long-running campaign from StepChange Debt Charity and others.
The announcement itself is a lengthy call for evidence – with the proposal on the table offering individuals up to six weeks ‘breathing space’ from further interest, charges and enforcement action on their debts, if they seek debt advice, and the introduction of statutory debt management plans. It is, in effect, an extension of Scotland’s Debt Arrangement Scheme (DAS), rather than the ‘extended’, up to 12 month, breathing space that many in the sector have called for.
The Trust’s director of external affairs Jane Tully takes a look at the Financial Guidance and Claims Bill as it starts its journey through parliament.
After a rather lengthy process involving no less than three consultations, the government has finally settled on a plan for the future delivery of money, debt and pensions advice. Earlier this month the Financial Guidance and Claims Bill finally entered parliament, starting in the House of Lords, a clear sign that the Government expect the bill to pass without too much controversy.
What does the Bill cover?
The Bill provides the legislative framework for the technocratic sounding ‘single financial guidance body’ – a new Non-Departmental Public Body which, assuming the legislation is enacted, will be in place by mid-2018. This replaces the Money Advice Service, The Pension Advisory Service (TPAS) and PensionWise, and will centralise the government’s pensions, debt and money guidance offer for consumers.
The Trust’s director of external affairs Jane Tully blogs about the Trust’s Living Wage Friendly Funder announcement.
Through our work at National Debtline, we recognise the role that fair pay plays in enabling people to balance their finances and manage their debts. The Living Wage scheme has played a significant role in addressing low pay across the UK and is backed up by calculations that reflect the real cost of living – which is all the more important at a time of economic uncertainty and rising inflation.
We are therefore pleased to announce that we have become a Living Wage Friendly Funder, accredited by the Living Wage Foundation – building on the previous accreditation we gained in 2015 as a Living Wage Employer.
The Trust’s director of external affairs Jane Tully blogs about the Trust’s Innovation Grants programme and the three new projects that will be supported over 2017/18.
Alongside the work that the Trust does to support people and small businesses to deal with their debts through National Debtline, Business Debtline and Wiseradviser, we are also proud of another, smaller, branch of our work – the Innovation Grants Programme.
Now in its sixth year, the programme has already supported 29 grassroots projects across the UK to deliver money and debt advice, often in less conventional ways and serving groups that can sometimes be harder to reach through traditional advice channels alone.
Tomorrow lunchtime the Chancellor, Philip Hammond, gives his first widely anticipated and heavily trailed Autumn Statement. Much has changed since the last major fiscal event, the Budget in March when George Osborne was still at the helm. For the new government, Wednesday will be a key opportunity to set out its stall in more concrete terms than we’ve heard over the past few months, and demonstrate that the focus on the domestic policy agenda hasn’t been lost of amidst the enormous task of implementing Brexit.
We’ve been taking a look at what’s expected to be announced in the context of the Trust’s work with people and small business owners in debt and financial difficulty and what else we’d like to see.
Here at the Trust we have long been concerned by the use of bailiffs by local authorities – and our advisers continue to help National Debtline clients confronted by this prospect week in, week out. I suspect most people would be surprised if you told them that the worst organisation to owe money to is often your local council – but the truth is that this is a big problem, and getting worse.
Our recent Stop The Knock campaign showed that 2.1 million debts were passed to bailiffs by local authorities in England and Wales during 2014/15, an increase of 16 percent over a two-year period. Of these, 1.27 million referrals were for Council Tax arrears – itself a growing problem. One in four callers to National Debtline were behind on their Council Tax last year – up from just 14 percent in 2007.
Today’s Queen’s Speech set out the government’s legislative programme for the year ahead. At a time when the public policy discourse is dominated by Brexit, it gives us a glimpse of government priorities in a post-referendum world.
Given that the domestic agenda has inevitably been less high profile than usual in the last few months, it’s no surprise that there was a heavy focus in the speech on supporting consumers and social reform. For people and organisations working in debt advice, the key bills to watch out for include: Read more