The Report considers some structural and political issues which may exacerbate housing related debt, noting a lack of consistency in implementing good practice guidance concerning calculation and payment of Housing Benefit.
It notes the difficulties inherent in different departments having different responsibility in relation to housing provision and the management of housing related debt.
Debt remains highly stigmatised. This may account for the reduced incidence of housing debt in both rural areas and where populations are less transient. However, meeting the needs of individuals in these localities presents additional challenges, in particular the need for anonymity by service users.
The Report notes that information and advice should be made available to the wider community as a preventative measure and presents models where a self help approach has begun to create a climate in which people can seek information in an anonymous way before crisis occurs.
The Report makes use of an advice needs assessment tool (ANARAK) that identifies the ambient need for debt advice and adjusts this by taking account of a range of socio-economic factors.
This suggests that more than 200,000 advice episodes would be required to meet need. We suggest on the basis of both the service mapping exercise and the locality studies that current provision does not meet this need. The relative absence of lower cost Type I interventions may exacerbate this shortfall and create a greater need for more resource intensive interventions as the problem becomes more complicated. There is a substantial short fall in reported court representation activities compared to figures for possession orders which suggests that many debtors may be suffering as a consequence of not having access to representation.
The total cost of meeting the need for housing related debt advice is under £7 million. In considering local authority rent arrears only this figure is equivalent to less than 15% of the current figure for arrears. The cost per household of such a service based upon these assumptions would be less than £4.00 per annum, or £1.50 per person per annum.
In considering this sum it is worth noting the commitment made by the Royal Bank of Scotland Plc. which has pledged a total of £1.7 million over 3 years to the Money Advice Trust to promote and improve free, confidential and impartial money advice. The Money Advice Trust is working with the leading independent advice providers to improve the quality and efficiency of money advice services across the UK. The increased funding from the Royal Bank will go towards a number of projects including the production of self-help materials for clients, improved training for advisers and the development of an 'e-learning resource'.
It should be noted that any specialist advice service to deal with housing related debt will need to build upon a solid platform of accessible and high quality generalist advice. The introduction of a Community Legal Service to Scotland provides and opportunity for an integrated response. Local authorities were identified as the most common funders of debt advice services. The most common providers were voluntary sector agencies.
Membership of advice networks was relatively high which suggest that these should be key players in the development of future strategies and implementation of the recommendations. There are concerns that those agencies not in networks may, inadvertently, be failing to comply with the licensing requirements of the Consumer Credit Act 1974.
As identified in the Money Advice Scotland report “A Time to Reflect”, quality assurance systems, access to training and external verification of individual advisers or the agency in which they work is notable by its absence. Interviews highlighted that agencies had identified a need for training and accreditation but an absence of accessible and affordable resources.
There is considerable variation across Scotland in both the profile of debt, the nature of need and the provision of services. Any development will need to be sensitive to these variations. However, not withstanding this sensitivity we consider that a national framework for housing related debt advice should be developed.
Both the range of new and proposed legislation and the introduction of the Community Legal Service, provide opportunities for the development of services that could meet this need. The inter-relationship between housing related debt and other debt means that any development will need to be multi-agency.
5.2 RECOMMENDATIONS
This section highlights a number of key recommendations that may be addressed by policy makers, funders of services and providers of housing related debt advice.
Recommendation 1
The volume of housing related debt advice work should be increased substantially
We suggest that the current level of provision is inadequate to meet demand. This may increase the level of indebtedness by failing to provide early interventions, increase social exclusion and lead to individuals being denied justice through a lack of representation in court hearings.
Recommendation 2
The expansion of housing related debt advice should be phased to ensure that a pool of appropriately trained individuals are available to undertake this work and co-ordinated through a central body.
Any expansion of funding for services should be carefully phased, as there is an inadequate supply of trained and competent advisers. The experience in England following the introduction of the Community Legal Service has seen an increasing crisis in recruitment and consequent upward pressure on salary levels as agencies compete for trained advisers rather than developing their own training programmes.
We understand that the Scottish Executive’s Social Inclusion Division have been in discussions with MAS with regard to the need to increase resources within a central support structure that may provide training.
Recommendation 3
Increased funding for housing related debt advice should be planned at a local level with new resources targeted at voluntary sector providers who can act and will be seen as independent advocates for their clients.
Any increase in funding for debt advice work should be in response to local needs assessments and locally led.
Across Scotland local authorities are currently the most common funders of debt advice services. In most areas, local authorities, as creditor landlords they have much to gain financially from an effective debt advice and should therefore remain the key players in any partnership arrangements for future funding. However, as creditors they should not be the only providers in the delivery of services. We suggest that the voluntary sector, as the current most common providers who are independent of creditors should largely maintain this role.
Recommendation 4
New funding from any source should supplement and not replace existing financial resources.
Any additional funding for housing related debt advice work should not be seen as a substitute for existing local authority funding but supplementary to this funding.
Recommendation 5
The Scottish Executive should provide a framework for planning that includes standard approaches to needs assessment, service mapping and gap analysis.
The Scottish Executive should commission the development of a pilot scheme that will lead to a standard approach to needs assessment, service mapping and gap analysis that is made available to all local authorities.
We understand that the Task Group charged with developing the Community Legal Service is also considering these issues. Any pilot programme developed by the Scottish Executive should be linked to developments in this area to ensure that an approach to housing related debt advice is consistent with an approach to other types of debt and other related areas of advice, in particular welfare benefits advice.
Recommendation 6
All money advice services should be subject to an externally accredited quality assurance system. Additional funds should be made available to assist agencies to secure accreditation.
The need for externally accredited quality assured services is critical. Both this Report and other studies highlight the absence of appropriate quality systems and adviser training at present. Scottish Homes, through HomePoint have developed an extensive quality assurance system that includes standards of service, competency training (under development) and external accreditation (currently being piloted).
This should form the basis of a quality assurance scheme for housing related debt advice services.
Recommendation 7
Specific adviser competencies for housing related debt (and other related debt) advice should be developed and form the basis of a nationally available training programme. The HomePoint competencies should be developed to cover housing related debt. This should be undertaken in conjunction with developments by MAS and Citizens’ Advice Scotland.
Recommendation 8
A central support body should be responsible for the co-ordination and delivery of this training across Scotland.
The central body referred to in Recommendation 2 (above) should be charged with developing a training programme for all advisers providing debt advice in Scotland.
Recommendation 9
Membership of advice networks should be encouraged to promote referral network and promote the development of quality services. Networks should be adequately resourced to promote the development of quality within their member organisations.
In addition to a central support service, local agencies have access to, and make use of a number of networks, such as Money Advice Scotland, the Citizens’ Advice Scotland And the Federation of Independent Advice Centres. These can act as agents for change in promoting quality services and in promoting referral networks at a local and national level. These networks will need to be adequately resources to undertake this function.
Recommendation 10
Standard systems for statistical data collection should be applied in all providers of housing related debt advice services
The central support body identified in Recommendation 2 above should be charged with developing a standard system of data collection by all providers of housing related debt advice services. This should be developed in conjunction with the any comparable initiatives in the emerging community legal service framework.
Recommendation 11
Appropriate local partnerships led by local authorities should be established to co-ordinate funding.
Housing related debt advice is currently subject to a mixed economy of funding with local authorities being the most common source of resources. As the principal funder these partnerships should be led by the local authority. This should continue.
Recommendation 12
Additional funds should be made available from the Scottish Executive to assist local authorities to address this need.
Local authorities capacity to respond positively to the recommendations in this report may be dependent upon some adjustments by the Government. For example, the Revenue Support Grant could be adjusted to provide additional (weighted) per capita allowances in respect of this responsibility.
Recommendation 13
Statutory Instruments should be used to ensure that the provisions in the Housing Bill regarding the housing information and advice are extended to include housing related debt advice.
We understand that the current Housing Bill is likely to contain a duty upon local authorities to provide for housing information and advice services in certain circumstances. This should be extended through use of statutory instruments to meet needs arising from housing related debt work. This should recognise the need for such interventions as a preventative measure.
Recommendation 14
Good practice regarding the management of rent arrears should be adopted by all Scottish local authorities.
The Accounts Commission and Scottish Homes (“Managing Rent Arrears”) has provided good practice guidance on rent arrears in which it identifies a range of management issues that are within the control of local authorities, including providing for debt advice services. The good practice guidance should be adopted by all Scottish Local Authorities.
Recommendation 15
The implementation of improvements in the administration of Housing Benefit should be a priority.
The UK Government has set out priorities for improvements in the administration of Housing Benefit in a DSS Green Paper. The implementation of these measures should be a priority. Recommendation 16
A sustainable and joined up approach to managing rent arrears within a context of challenging social exclusion should be promoted.
We suggest that the management of rent arrears needs to be seen within the context of promoting social inclusion rather than just debt recovery. Whilst rent arrears have increased, this has been out-stripped by the rate of growth in possessions granted by the courts. This may suggest a more aggressive approach to debt recovery that may not be consistent with broader social inclusion priorities.
This may include better co-ordinating the housing finance and housing management functions, and, developing standards on negotiating appropriate repayment schedules taking a holistic approach to the debtor’s wider circumstances.
Recommendation 17
The development of innovative methods of delivery including telephone based case-work services and internet services should be explored.
Physical access and psychological access to services (where the stigma of debt may act as a disincentive to service use) needs to be addressed. This is particularly problematic in rural areas but is not exclusive to them.
These issues of access should inform the evaluation criteria for the National Debt-line pilots. The growth in the sale of financial services over the Internet should be paralleled by the growth in advice services utilising this medium.
Recommendation 18
Innovative services focussing on early intervention should be encouraged through the national funding of local pilot projects. This should include non-advice interventions such as projects promoting consumer education and financial literacy.
Insufficient resources are focussed upon early intervention, with the possible exception of mortgage arrears.
Recommendation 19
Additional funding for court representation services should be a priority.
Insufficient resources are focussed on court representation. This can be costly, early studies of pilot lay adviser projects that are court-based (in both Scotland and elsewhere in the UK) suggest that this may be a cost effective means of providing such services.
Recommendation 20
Services developed as a result of the implementation of these recommendations should be widely promoted.
Any new developments expanding the quality and the quantity of debt advice should be widely promoted to ensure that people benefit from early intervention and crisis services.
Promotion should only follow the introduction of new resources as existing services would be unable to cope with any increased demand.
Recommendation 21
Further research should be commissioned.