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Keeping people out of debt

Source: Public Sector Executive Mar/Apr 12

Lesley Robinson, debt advice programme director at the Money Advice Service, discusses the progress the organisation has made so far.

High quality debt advice can transform the lives of people in financial crisis. It can also result in economic benefits for creditors. It makes sense then, particularly so in tough economic times, to bring greater coherence, consistency and sustainability of funding to the fragmentary provision of debt advice currently available to those most in need.

These are our aims at the Money Advice Service, as we take on a new coordinating role for debt advice at the request of Government. In the months since accepting the request in July 2011 we have carried out a wide-ranging programme of research and consultation to clarify the numbers of people for whom debt advice is a priority, and the needs and motivations of those people.

This was supported by the advice sector, creditors and Government, who gave their time and their views to ensure we are building our coordination from a well-informed base. In particular, we are grateful to the Department for Business, Innovation and Skills, which provided the funding. The findings are available on our website: workingwithus/debt.

In response to the research, consumer minister Norman Lamb MP said: “I would like to thank the Money Advice Service for commissioning this research into the debt landscape. It will be invaluable in shaping the provision of debt advice in the future – in particular the Money Advice Service’s new role in coordinating consistent debt advice to meet consumer needs.”

Gerard Lemos, chair of the Money Advice Service, said: “Debt difficulty is a huge worry for millions of people. The best way to tackle it is to prevent it. But when people get into difficulty and don’t know where to turn to, we will work with creditors and others to ensure those suffering get the immediate help they need. The Money Advice Service is developing a more efficient service from which millions of people stand to benefit in the coming years and we look forward to working with a range of partners to deliver this.”

The research has been instrumental in forming the high-level programme of work which we published earlier in February. It is based on four key principles;
• Reach and accessibility – increasing availability in a cost-effective way
• Simplicity – easy for people to get the right advice at the right time
• Self-help – empowering people whenever practical
• Addressing gaps in delivery – funding services ourselves where necessary

Importantly, we have prioritised the continuing provision of high quality debt advice during 2012/13. All but a modest proportion of our budget for this year will go to ensuring continuity of a frontline service. We will fund six trusted delivery organisations across England and Wales that provide debt advice face-to-face and contribute funds proportionately towards debt advice provision in Scotland and Northern Ireland.

But we’re not just providing funding. We will be increasing capacity by 50% by introducing efficiencies and spreading best practice. As a result, 150,000 will receive debt advice through this programme over the next year.

For the longer term, we’ll deliver a new and more coordinated system for the delivery of debt advice, which will be in place by autumn 2013. It will mean more people in debt find the right sort of help for their needs more quickly and easily. Built into this newly coordinated system will be the means to harness existing resources better, including using the brands already out there that attract people to advice at a time of crisis. We’ll also be bringing everybody’s standards up to match the best, and to capture data in a way that will inform continuous improvement.

Two significant considerations inform our every step. The first is that we are spending money raised through the levy raised by the Financial Services Authority on financial services firms, and this needs to be used as effectively and efficiently as possible in the service of consumers.

The second is that our aim should not be simply to meet the demand for debt advice, but to reduce the need for it. The best way for us to do that is to align our debt advice coordination work with our money advice operation in a way that helps people get out of debt, stay out of debt and feel prepared for all the events in life, both expected and unexpected, that can cause financial shocks.

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