Tackling problem debt advice: routemap

A sustainable debt system

The TPDG noted that sustainability is driven by a variety of factors. Nonetheless, their recommendations focused on two key themes – workforce and funding – and our actions do the same.

Action 4: The Scottish Government commits to working with the sector to develop a workforce strategy.

Our aim is for a workforce that is diverse, well supported, and recognised for their professionalism and expertise. The TPDG and attendees at the sectoral event on the future of free debt advice conveyed a clear message that failure to achieve this threatens the quality and quantity of debt advice. The trend of rising demand without funding to match demoralises staff. This is compounded by the relatively small size of the workforce, and its aging profile, which leaves the sector vulnerable to the loss of collective knowledge and expertise.

Many of the steps taken throughout this routemap should have a positive impact on debt advisers, in particular longer term funding, investment in new technologies, and a more thoughtful approach to monitoring and evaluation. However, the Scottish Government also recognises that a more active programme is needed, and that the voices of those who work to provide free debt advice must be heard and responded to.

The TPDG identified five broad principles that will underpin the development of a successful workforce strategy:

1. Retaining expertise – high turnover rates can be detrimental to both the quality of advice provided, and the relationships between organisations and users. The fundamental aim of a workforce strategy must be to ensure that debt advice is seen as a desirable career that can offer security, satisfaction and a path to progression if desired.

2. Attracting new talent – the need to build long term expertise must be matched by a commitment to continually encourage new entrants into the profession who will bring new ideas and perspectives to the sector.

3. Driving learning and development – quality of service depends on consistent training, and it should be of a level that recognises the difficulty and professionalism required by debt advisers.

4. Maximising adviser time to focus on clients – both the quantity of time and the quality matter. Reporting requirements should be streamlined wherever possible to ensure the former, and technological innovations and smoother referral processes must be developed to aid the latter.

5. Protecting adviser wellbeing – providing free debt advice can be an intensive experience, often involving users who are in emotional distress, and this can be exacerbated by the numbers of users seeking help. Ensuring advice organisations have measures in place to support and protect their workers is essential to maintain a sustainable workforce.

With these principles in mind, the Scottish Government have asked Money Advice Scotland to begin an exploratory programme to understand the concerns of advisers. This will inform development of the workforce strategy over 2019/20.

Next steps:

• We will publish the exploratory MAS report shortly, and use its findings to progress the final strategy.
• We will hold a series of consultation events to inform and test development of the strategy.
• We will publish the strategy by summer 2020, and monitor its impact at regular intervals thereafter.

Action 5: The Scottish Government will begin rolling out multi-year funding cycles for free debt advice projects.

As the TPDG noted, the majority of project funding for free debt advice is currently awarded on an annual basis. This leads to insecurity for advice providers, meaning it is difficult to retain staff or develop clear career progression. It also makes it challenging to develop and test innovative ways of working, and by creating an ever-more competitive funding environment, it creates barriers to collaboration between advice providers.

The current funding model exists for a variety of complex factors, and is a challenge for funders and advice providers across the entire free advice sector. The Scottish Government will continue to explore how these challenges can be overcome in general, and specifically, we are exploring how to deliver lasting change to the way levy funding is allocated and evaluated.

However, developing this lasting solution is likely to be longer term work, and the negative impacts of short term cycles should be addressed as a matter of urgency. Ahead of any decisions on the long term model, we will therefore support the majority of levy-funded projects on a multi-year basis from April 2020/21. We recognise that there will be a small minority of projects – such as pilots or short term gap-filling – that benefit from shorter funding cycles, and we will continue to provide that flexibility.

Next steps:

• We will work with the Scottish Legal Aid Board to design a new programme of projects using part of the levy funding that will offer multi-year funding starting in 2020-21.
• We will evaluate the new projects to ensure the opportunities and challenges of this new approach are well understood.
• We will use the experience of multi-year funding to understand and overcome challenges that currently prevent its adoption by other free debt funders and across the wider advice sector.

Action 6: The Scottish Government commits to developing a more sustainable system of levy funding that complements the wider free debt advice system.

The TPDG recommendations acknowledge that levy funding cannot ensure sustainability of the free debt advice sector. However, its application should complement and not duplicate resources from funders and provide support to advice providers.

The Scottish Government will therefore develop a new model to allocate levy funding that complements local delivery and sets national priorities. The new model will ensure the sector has the opportunity to influence how levy funding is spent.

The new model must:

• assess provision of free debt advice across Scotland and how it complements or interacts with other provision;
• recommend where levy money could have the most impact; and
• evaluate outcomes of interventions to monitor impact.

With these criteria in mind, we have commissioned work to explore alternative delivery models for levy funding. The findings of the first stage of this work have recently been published and identify potential models^[5]. This report will form the basis for a much wider consultation on the final model. We recognise that transitioning to a new model will bring challenges, and we will ensure adequate time to explore the impacts of changes and the views of users, providers and funders.

Next steps:

• We will use this report as the basis of consultation with the sector on the way forward.
• Where there are opportunities, we will test the applicability of these potential models between 2020 and 2023.
• We will develop a long term model for allocating funding and ensure it is implemented by the beginning of the 2023/24 financial year at the latest.

Action 7: The Scottish Government commits to exploring new sources of funding for free debt advice.

The TPDG – along with many others – highlighted that investment in free debt advice is falling. Tightening budgets in the face of ongoing austerity measures and the uncertainties of Brexit mean this is unlikely to change. The Wyman review already considered this in detail, and recommended an interim increase in the levy funding and an expansion of voluntary Fair Share Contributions. Although welcome, concerns persist among advice providers that these recommendations do not go far enough.

The Scottish Government recognises that there are other potential models to fund free debt advice. These include moving Fair Share contributions from a voluntary to a statutory scheme; increasing central or local government funding; or expanding the levy currently paid by financial firms to cover other sectors. Each of these brings its own challenges, and none are likely to be a short term solution.

The Scottish Government also notes that the UK Government are considering the challenges around the adequacy of debt funding, and that, even where the Scottish Government can act alone, it would be wise to act in collaboration where possible.

Next steps:

• We will undertake work to understand the long term impact to Scotland's free debt advice providers of the Wyman recommendations around Fair Share Contributions.
• We will ask the TPDG to advise on viable options for new funding sources.
• We will look to work with the UK Government and the Money and Pensions Service to ensure any solutions are practical and take account of UK-wide interventions.