New ‘State of Debt Advice’ Briefing
WADA has today (29th November') published a new briefing concerning the ‘state of debt advice’.
The briefing follows consultation with sixty advisers, from around the country, last month and sets out their priorities for the forthcoming Money and Pensions Service (MaPS) consultation on its new debt advice commissioning strategy (expected early next year).
Top of the priorities identified for MaPS is the need for them to address a chronic lack of capacity in the sector. Just under half of advisers reported that their capacity had reduced over the past year, whilst demand had increased. Advisers were also dealing with more complex cases. Many services reported long waiting lists for advice, which was causing many clients to disengage or leading to less successful outcomes for those who turn to the commercial sector. The briefing therefore calls on MaPS to undertake a review of the funding level needed to provide sufficient debt advice services over the next five-year period; to publish this funding target as part of its forthcoming commissioning strategy, together with details of any shortfall, and to press Government to provide sufficient resources through the FCA levy. MaPs should also consider whether, and how, funding for debt advice could be channelled alongside funding for housing and/or welfare benefits advice, and what role local or sub-regional agencies should have in the direction of debt advice funding.
But MaPS also needs to ensure a better balance of funding between national, regional, and local services – and between those providing ‘advice only’ and those providing ‘advice plus casework’ - and put in place more effective referral arrangements between these to ensure clients receive a level of service which meets their needs; avoids duplication of effort, and ‘double counting’. Only 3% of advisers who referred people to national agencies felt the client’s case was dealt with to a high standard, with 87% of referred clients needing to return to the local agency.
MaPS also needs to do more to address recruitment and retention problems and to remove unnecessary bureaucracy, particularly with respect to unhelpful and ineffective ‘quality assurance’ processes. A five year workforce strategy for the sector is needed to address low morale and poor remuneration. MaPs should also provide clear guidance to its funded agencies concerning what is needed to meet their advice standards, including with respect to Confirmation of Advice Letters and Independent File Review processes. It should take action to stop unnecessary processes which are going beyond these in order to release resources to the front-line.
Finally, advisers raised considerable alarm at the award of a MaPs contract to the commercial provider, Gregory Pennington (t/a Money Wellness). MaPS has previously stated that it has put in place safeguards in this contract to address possible conflicts of interest, but has not provided any details of these. We therefore call for MaPS to publish these details as a matter of urgency.