We know that debt advice works. It works for the people who receive it, and it works for society as a whole, benefitting the UK by up to £960 million a year. We also know that those delivering debt advice provide support that can transform people’s lives, and I hear this time and time again in my calls with people who have received advice from the services we fund.
Our most recent survey on debt advice need shows that every region and nation of the UK has seen an increase since 2019 in the number of people needing debt advice. So, although our annual funding envelope for debt advice services in England has increased to £76 million for the next few years – that’s a huge increase on £43 million pre-pandemic in 2019/20 – that money will have to go further.
The number of people needing debt advice, and the complexity of cases presenting, will both increase over the coming months and years as people whose financial wellbeing was already low have been hit hard by the pandemic such and are now facing the adverse effects of increased costs of living. Between one in four and one in five people are now at risk of tipping over into needing debt advice.
So, our challenge is how do we get expert debt advice to more people?
The increase in funding is a big part of that, of course, but that alone won’t meet the growing demand. We also have to work collectively as a sector, be more innovative, which includes looking at how we use technology both in how and when people engage with debt advice and in how we manage case work and link clients to other services they need.
We have heard loud and clear that debt advisers want to be part of the process for defining how all of this will work. So, as well as working with the lead organisations we directly fund and others, we will make sure that we talk to and hear the views of front-line debt advisers and their clients to inform how we can maximise the impact of our funding, how we can reach more people and what local provision looks like longer-term. This had already been part of the co-design phase of debt advice commissioning, but we will broaden this out as we define what happens next.
We have a duty, in everything we do, to consider the needs of people in vulnerable circumstances. For some people, including those with complex needs, it will be through locally provided services in their towns and communities. For many others, it could be a combination of different channels at different points in their journey out of debt. What’s important is making sure that people can access the services they need that will drive positive outcomes for them.
Face to face advice delivered in people’s communities is an important component of this within a system where people can select the channel which best suits their needs.
Debt advisers have told us that the last few years have hit their own wellbeing hard, so we’ve made supporting wellbeing a core part of the commissioning process. This includes moving to a system that enables advisers to spend the time they need with clients and to take a break between appointments, especially the challenging ones. We’ve also asked bidders to include a strong plan for adviser wellbeing in their submissions, so that their approaches are tailored to the needs of their debt advisers and specific delivery models, rather than a one-size-fits-all approach.
The new Quality Assurance Framework
We’ve also taken on board feedback about DAPA and it will be fully withdrawn by the end of this financial year. There will always be a need to have oversights and controls which ensure that people, wherever and however they’re receiving debt advice, can be confident that it is of good quality. But we need to balance that with a framework that supports and enables positive outcomes and doesn’t become a burden for the sector.
We have undertaken feedback from all of MaPS’ delivered and commissioned services, from money and pensions guidance to debt advice, and it has been very helpful to hear partners and advisers’ views on what’s worked and what hasn’t. From the 1st of April we will be aligning our quality assurance testing to the FCA approved MaPS Standards and we will be providing guidance and tools to support our partners in working towards compliance with these Standards.
We have undertaken feedback from all of MaPS’ delivered and commissioned services, from money and pensions guidance to debt advice, and it The new Quality Assurance Framework will focus on assessing the suitability of advice against the MaPS Standards and the adequacy of the controls in place.
We acknowledge that it will take some time to develop a new framework and will be working with our partners for the next 10 months to complete a “test and learn” phase and take further feedback on implementation. This “test and learn” will help us identify gaps, opportunities for continuous improvement, and reflect feedback and learnings gained through sector engagement.
Debt Advice Commissioning
The commissioning process is taking longer than we had hoped. We know that it is frustrating to bidders and advisers alike. As an arm’s-length body of government, spending public money, it’s right that we take the time to run a compliant, fair and transparent procurement process. We also have to make sure that we get all necessary budgetary approvals. It’s clear, though, that the checks and balances of the procurement process have worked.
So, we’re proceeding with the procurement of new services for national and business debt advice, and for two of the three debt relief order administration hubs. For regional services, the evaluation phase has done its job and shown us that we need to take more time to work with the sector to identify a different approach. In the meantime we will be protecting continuity of services through new ten-month grants followed by a further grant for our current regional providers whilst we work with them and other stakeholders to shape our longer-term plans.
Throughout all of this, we must not forget about everything that comes before and after debt advice. MaPS has a unique role in coordinating the UK Strategy for Financial Wellbeing which is intended to improve people’s relationship with their money and pensions throughout their lives. So we are working with partners to ensure more children and young people receive a meaningful financial education, giving them the tools and skills to help them manage their money from first payslip to pension.
MoneyHelper offers money and pensions guidance, so that more people receive the support they need to feel confident and able to make the right financial decisions for them. And from reducing the number of people using credit to pay for everyday expenses, to building a nation of savers and helping more people plan for and in later life, we will be there supporting people to take control of their debts and build a more financially secure future.
I’m excited about what happens next for debt advice and for financial wellbeing more widely. I know that we are all, throughout the sector, committed to the life-changing potential of debt advice.
I’m looking forward, now that pandemic restrictions have lifted, to spending more time with colleagues and partners on the frontline and to hearing directly from all of you about how we can work together to help more people get the debt advice they need, and the more secure future they want.
About the author
Caroline Siarkiewicz is Chief Executive of Money and Pensions Service and developed and published the UK Strategy for Financial Wellbeing.
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