Life-saving Leeds debt advice service loses £100,000 funding in controversial shake-up

A Yorkshire debt advice service is set to lose £100,000 in funding as a result of controversial changes to Government funding - meaning it will no longer be able to help over 600 people a year.

Taira Kayani, Chief Executive Officer of Better Leeds Communities
Taira Kayani, Chief Executive Officer of Better Leeds Communities

Better Leeds Communities is among the independent debt advice services set to lose out from proposed changes to the way the Government’s Money and Pensions Service contracts services from April.

Concerns about changes to the funding model - which will involve cuts to face-to-face debt advice services, a greater reliance on call centre and internet support and a reduction in the number of overall contracts - were raised by Yorkshire MPs in Parliament this week.

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Leeds Central MP Hilary Benn told a Westminster Hall debate that “a dramatic reduction in face-to-face advice” was feared by four debt agencies in his constituency, including Better Leeds Communities.

Taira Kayani, chief executive officer of the charity which was established in 1983 to help support families and reduce poverty in Leeds, said the organisation has already been informed it will not be eligible for MaPS funding from next year that is normally subcontracted to them via Citizens Advice. She said this was due to Citizens Advice taking the decision that the planned contract changes mean it can only work with its own bureaus rather than independent charities.

She said previous MaPS funding has been worth over £100,000 to the organisation and paid for the equivalent of two full-time debt advisers, as well as administration and management costs.

“It means around 660 people will not receive debt advice from us next year,” she said.

“We are officially on a decommissioning trajectory and we can’t take on any more debt relief orders. We will look at case referrals in January and be mindful of the fact we don’t want to take on work that will still be open by the beginning of March.”

She said while the charity does offer other debt advice services, they are for specific groups of people and therefore more limited in who they are open to.

She said face-to-face debt advice meetings are vastly preferable to services over the phone and the internet for a wide array of reasons - including the technology, language and literacy challenges that face some people in need of support that are easier to deal with in person. Face-to-face meetings also help people assess the bills they are facing and understand what action they need to take.

“An advisor is able to make a much better assessment when a human being is sat in front of them,” she said.

“Many people will have buried their head in the sand for months and months before they seek help. If they come in for a meeting, you can go through paperwork with them and get the momentum in place to support that client. If instead it is a phone call saying we will send you some forms out and you send them back, that can become another unopened letter and the momentum and motivation is gone.”

She said the idea that people who have limited digital access or in some cases be unable to speak English or even read to a basic level will be able to access more effective support through the internet or via a call centre is unrealistic.

“It feels like a bunch of middle class people thinking everything operates in the way it does in their world and frankly it doesn’t. There seems to be a complete inability to have understanding or empathy with people in crisis due to debt. But with changes to family circumstances or a couple of missed pay cheques, it could happen to any one of us.”

She added that she was particularly concerned that the reforms will mean service providers will have to fund translation services themselves - putting further pressure on budgets.

During the Westminster Hall debate, MPs highlighted the life-saving nature of debt advice charities, citing the estimated 100,000 attempted suicides seen each year because of debt issues.

Ms Kayani said: “I had one lady who had been helped by one of our debt advisers ring me and she said to me the way she had been supported had actually saved her life. She had been suicidal over the debt.

“She said she had kept losing momentum but the adviser just helped give her a kick and she turned things around.

“If that had been a call centre and you are working to targets, what are the chances of them being able to keep going back and give that type of attention to the lady we helped?

“We very sadly have had clients kill themselves over their debts. It is not an ‘it might happen’, people do it.”

'Changes will help more people get help'

The Money and Pensions Service says it planned changes will allow more people to access debt advice support.

A spokesperson said: “Even before the financial impact of the pandemic, we knew that the demand for debt advice and the need for us to increase the number of clients helped would significantly rise beyond the debt advice sessions MaPS supported in 2019/20.

"This demand will remain high in the years ahead, which is why we need to take this opportunity through the commissioning process to enable more people to access expert, free-of-charge debt advice each year.

“We have increased the overall funding available to provide debt advice in the years ahead and instead of dictating the channel through which that advice should be provided, we have asked providers to develop services that best meet the needs of clients.

“Our evidence (including feedback from debt advisers and debt advice providers) tells us that there will be a number of people who need face-to-face support to meet their needs, and so we have taken steps to ensure in-person debt advice remains an important part of our funded services.

“Our research (including recently with the Money and Mental Health Policy Institute) has highlighted that many people, including some of the most vulnerable in our society, actively prefer digital or telephone channels because of their greater anonymity and flexibility they provide. Being able to access advice from home can also be beneficial for people who would find it difficult to attend an appointment (or series of appointments) in person. Outcomes for people are comparable in both face to face and remote debt advice channels.

“We have asked bidders to propose a service offering based on their own knowledge and experience against our requirements. Therefore, until successful bids are confirmed, we will not know any change in the proportion or total volumes of debt advice provided by individual channels. We cannot comment further as we are in the middle of a live procurement exercise that is commercially sensitive.

“MaPS has not commissioned advice based on channel specifically. We have asked bidders to propose a service offering based on their own knowledge and experience against our requirements. Therefore, until successful bids are confirmed, we will not know any change in the proportion or total volumes of debt advice provided by individual channels.

“MaPS requires suppliers to ensure that clients who access the service with additional language needs, sight or hearing impairments have access to translation services. This must be costed into suppliers’ bids for funding.”

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