Government finds £27 million for continued funding of debt advisers

Feb. 14, 2011 - PRLog -- Specialist debt advisers were facing redundancy in January as the government announced there were no plans to continue paying the £27 million per year for the Financial Inclusion Fund. Today it has been announced that the government has now found a £27 million ‘contingency’ to keep the service running for another 12 months.

This government fund pays for around 500 specialist debt advisers to give free debt advice in England and Wales and has been running for the last 5 years. Advisers were given notice of their employment as the government had originally said it would axe the fund.

Each year 100,000 people get free debt advice and campaigners had expressed concerns that the axing of the Government service would mean sick and vulnerable people with debt problems may find themselves with nowhere to turn, essentially trapped by their debts.

The Citizens Advice Bureau (CAB) still offers free debt advice however the Financial Inclusion Fund pays for the additional specialist advisers, who can deal with complex cases, to work from the offices of the CAB and other community halls in England and Wales. In January these advisers had been asked not to work with new debt clients and redundancy notices had been given.

Mark Hoban, Financial Secretary to the Treasury said: "I am very happy to be able to confirm the continuation of this important service."
"Effective debt advice can be the first step towards regaining control of your finances. It can also help people to make the most of their money in the future and avoid unsustainable debts."

"The government intends to put the provision of debt advice onto a more sustainable footing. We want to see a flexible and cost effective response to debt problems, so that people can be helped in a way that works for them."

Business Secretary Vince Cable said that, after the next year, the government would be looking elsewhere for help in funding advice services, such as the debt advisers.

"While the government has maintained funding for this programme, it provides only a small part of the revenue necessary to keep Citizens Advice afloat,"
"I would like to take this opportunity to call on the other funding streams, such as from local authorities, to help provide whatever support they can to keep this excellent service going."

Jay Lowe, the debt advice manager at a Citizens Advice Bureau in Stoke-on-Trent said: "This is only a stop gap. What happens this time next year?"
"We have already lost two people who have taken other jobs because of the pending cuts and then of course it means recruiting or training up people to replace very experienced case workers."

Delroy Corinaldi of the Consumer Credit Counselling Service, a registered charity based in Leeds, said:

"We are concerned that any reduction in the amount should not impact on peoples' ability to get free face-to-face debt advice."

"This should put free advice in a place where it can continue to take on the fee-charging sector which the recent Office of Fair Trading review found to be unfit for purpose."

"The challenge now is for debt charities to work together to provide free debt advice, face to face, over the phone and online, for those who need it."

Craig Gedey, from the Debt Advisory Line said that "scrapping the Financial Inclusion Fund would have meant turning away thousands of people who may be desperate for help with their debts."

"There must be a long term plan for good quality debt advice; Debt Advisory Line is one of fourteen DEMSA approved debt management companies in the UK." Visit www.debtadvisoryline.co.uk for more details.

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Debt Advisory Line is the Debt Management Provider of the Year 2008 and 2009. Debt Advisory Line is a Debt Solution Company offering help and advice award winning "best Debt Management Plans", IVAs, Trust Deeds, Debt Relief Orders and Bankruptcy.