Debt Arrangement Scheme - returning funds to the free advice sector: consultation

3. How much money will be generated?

3.1 There is a large element of uncertainty here. In particular, the proposals in the wider consultation are intended to make DAS significantly more attractive to providers. Together with the changes introduced in October 2018 which aim to increase the number of people who could benefit from the scheme, the hope and expectation is that DAS will help significantly more people in future. But as DAS is demand-driven, it is difficult to forecast accurately either the number of future DAS applications or how many of those applications will come from the public sector.

3.2 In addition, the SG knows that some private sector organisations have already approached public sector organisations, offering to provide support on a pro bono basis on the understanding that any potential DAS clients will be referred to them as a CMA. We can see advantages for clients and both sides in such arrangements - but should these prove widespread, this will likely reduce the number of cases in which AiB will be nominated as PD.

3.3 The monies available will also depend on the level of contributions being made by debtors. In 2017/18 the average contribution made by a DAS debtor was £170 per month. However, there are considerable variances in the monthly instalment amounts. The highest monthly instalment being paid in a DPP originating from a public sector adviser in the last 4 years is £2,489 (case approved in 2015) and the lowest contribution being paid is £4.95 per month (case approved in 2017).

3.4 Since the new approach only applies to new cases, the funds available in the short to medium term, therefore, are likely to be small, but there is an expectation that they would increase in line with growth in DAS demand levels.

3.5 Working from statistical analysis of the current DAS Scheme provided by AiB, some initial estimates are set out in Appendix A.

3.6 We appreciate the uncertainty over the level of funds available for return to money advisers will make it difficult for stakeholders to balance the individual costs and benefits of the options outlined below. However, we are keen to obtain views on the general principles around the mechanics, and thoughts on the best ways of achieving the outcomes outlined above.