Debt advice agencies under strain as the cost-of-living crisis deepens

Front-line debt advisers are calling for the Money and Pensions Service (‘MaPS’) to act urgently to address a growing staffing crisis within local debt advice agencies. 

A new survey of 120 debt advisers operating under contracts with the Money and Pensions Service (MaPS) reveals a crisis of supply as demand is rising because of the cost-living-crisis.

The supply of front-line debt advisers was disrupted significantly last year due to threatened cuts of over £14 million to community-based agencies, leaving many to exit the profession. Although the proposed cut was averted at the last minute and pre-existing arrangements extended for 10 months from April, services remain destabilised and under growing pressure.

Findings from a new survey, which was conducted by We are Debt Advisers (‘WADA’), now show that there has been a further deterioration in the supply of debt advice in many agencies since April.

It particularly highlights a loss of staff within debt advice teams in Citizens Advice. Over half of responses from debt advisers working within Citizens Advice reported that their team had lost staff since April, and around one quarter were now expected to meet increased targets as a result.  85% felt pessimistic about their future, with many noting that they were now unable to meet demand.

However, advisers from other MaPS funded agencies also reported problems, with 90% of all respondents reporting that there has been no improvement in capacity since April whilst demand has been increasing and cases have become more complex.

Little evidence of improvement in working conditions

When MaPS extended its contracts in April 2022, it also promised to embark on a “test and learn” phase to improve its quality assurance framework, which it acknowledged was over-bureaucratic and contributed to poor morale. However, the survey indicates there has been little progress, with fewer than a half of respondents aware of any new quality assurance systems being tested in their workplace and only one third of advisers reporting improvements.

The need for action

Responding to the survey’s findings, WADA have today written to MaPS calling for:

·       An extension of the grant agreements for community-based services to March 2025;

·       For the grant agreement to include additional funding to help agencies meet cost-of-living pressures for debt advice staff, and

·       For MaPS to set out its plans for a long-awaited consultation with the sector concerning longer-term arrangements.

WADA Chair, Amy Taylor, said:

“Many debt advice agencies are unable to recruit to vacant positions due to funding uncertainties and poor working conditions in the sector.  MaPS has to take responsibility for this.  It needs to act quickly to extend and improve funding arrangements, remove unnecessary bureaucracy, and start listening to the front-line about the future of community-based services.”