Scotland's statutory debt solutions and diligence - policy review response: consultation

1. Ministerial foreword

Countries around the world have been facing unprecedented challenges and a strain on their economies in recent times, and Scotland has not been immune to this. The COVID-19 pandemic introduced huge uncertainty – with a far-reaching impact on business and employment arrangements for thousands of people in Scotland. Now we are in the midst of a cost of living crisis, exacerbated by the pandemic related uncertainty and placing many households under extreme financial difficulty. Unfortunately, for many, unsustainable debt will be the regrettable consequence.

It is therefore essential that we look to maximise the effectiveness of our systems that provide the necessary protection and support to help people navigate their way out of the pressure of problem debt. We have good mechanisms in Scotland – with far-sighted reforms introduced in 2015 placing high quality consumer debt advice at the centre of the system. The Debt Arrangement Scheme has been a major success and remains the UK's only statutory debt repayment solution – reforms introduced immediately before the on-set of the pandemic have been an enabler for the scheme to grow, allowing more people to take control of their debt through a manageable payment programme.

It is important that we continue to build on our current debt solutions and I am therefore grateful to the many professionals who have given their time and commitment to help the Scottish Government review our solutions and mechanisms to ensure they are fit for purpose. They have worked together to bring forward a number of recommendations which drew on a wide range of evidence, including case studies and statistics, with the aim of building on improvements which we introduced in response to the pandemic.

The information in this consultation provides the Scottish Government's response to the recommendations put forward and outlines the work that will be taken forward as a result. I would encourage anyone interested in our debt solutions and debt recovery mechanisms to provide feedback on these proposals. My intention is that these proposals are considered either for inclusion in a future Bill before the Scottish Parliament or to be implemented through secondary legislation or administrative measures, where appropriate.

We look forward to receiving your views on this consultation and I thank you for taking the time to contribute.

Tom Arthur MSP
Minister for Public Finance, Planning and Community Wealth