This Debt Awareness Week, Craig Simmons, head of debt policy and strategy at the Money and Pensions Service (MaPS), provides an update on MaPS activity to drive forward better debt advice. 

On the verge of a new financial year, organisations across the UK are no doubt deep in thought about their budgets for the year ahead. While entirely true for the debt advice sector too, it’ll also be our customers’ budgets that are at the forefront of our minds in light of the Covid-19 pandemic.

Increased debt advice demand and investment

A host of organisations, including MaPS, have highlighted that need for debt advice is increasing. We expect that increased demand for services will materialise as the country lifts out of social distancing restrictions and as ongoing support schemes end.

As a result of this, the debt advice sector must play a crucial role in the UK’s recovery from the pandemic. That’s why MaPS is continuing to invest heavily in the sector at this critical time, and I’m pleased to confirm our debt advice budget in 2021-22 for England will be £94.6 million. This is a more than 70% increase since 2019-20 and reflects MaPS’ decisive action to ensure more support is available to customers in need of debt advice. This we expect will provide up to 1.5 million more sessions of debt advice over the next 12 to 18 months, while enhanced money guidance will be available to a further 2 million people in our broader MaPS services. 

This larger budget is only good news if we use it effectively. We remain committed to working collaboratively with debt advice agencies, creditors, government and other relevant bodies to increase our impact. Let me put on record our thanks and gratitude to the many stakeholders who have worked with us already to support our collective response to the pandemic.  

The largest proportion of the budget will be spent on funding our long-standing debt advice grants, which will continue to deliver debt advice to hundreds of thousands of people in the year ahead. Much will be also invested in newer initiatives too, and I set out an update on a handful of these below, building on my previous blog from November 2020.  

Ongoing pandemic response

Much of our increased budget will continue to be focussed on providing additional debt advice capacity ahead of the expected spike in demand. This will allow us to continue with the recently recruited new debt advisers – around 550 – into 2021-22 and make a material investment in digital debt advice capacity and capability over the next 12 months.

MaPS is set to work with a partner organisation with specialist expertise to help shape our investment in digital services. Part of their brief is to engage with the sector on the work and we hope that will ensure the result will be more debt advice sessions now as well as improved digital functionality for years to come. We recently also funded set-up costs of the new Covid Payment Plan which we anticipate will help thousands of people in the coming year.

Breathing Space

MaPS hugely welcomes the arrival of the Breathing Space Scheme, going live on 4 May 2021.  This is a landmark policy giving people in problem debt the right to legal protections from their creditors. There are two routes to accessing breathing space: a standard breathing space, which provides up to 60 days of protection and a specialist mental health access mechanism, which provides unlimited breathing space for the duration of someone’s mental health crisis care.

While HM Treasury and Insolvency Service administer this policy, MaPS is keen to do what it can to support successful implementation. In the coming year we will fund free training on the scheme for advisers and offer a specialist support service to help advisers deal with related queries.  We have also made changes to our core grants to ensure debt advisers have more capacity to support implementation and ensure customers can get access to the vital protections offered by Breathing Space. This is in addition to the 11% of additional budget I mentioned in my last blog which we included in our 2020-21 grants to help advisers support customers in complex circumstances. This will be retained in 2021-22.

MaPS is proud to be providing a single point of entry for the Mental Health Alternative Access Mechanism to Breathing Space. This will offer crucial protection to some of the most vulnerable customers in our society and provide a clear and effective route for mental health professionals to gain access for their patients.  We are delighted that £2.4 million of our budget will be dedicated to this mechanism, which we will offer in partnership with a specialist debt advice organisation.  

Learn more about Breathing Space

Debt Relief Orders

As I mentioned in my previous blog, Debt Relief Orders (DROs) are an absolutely critical debt solution used by low income customers who are often in vulnerable circumstances. From October 2020, we started providing funding for DRO administration in England via the Competent Authorities, ensuring that access to the solution remains available. This year’s budget settlement allows us to reaffirm our commitment to funding DRO administration and allows for higher volumes than in the previous year. This helps ensure we are ready for increased demand and recognises the new expanded qualification criteria recently proposed by the Insolvency Service.

Debt advice recommissioning

As confirmed in my last blog, MaPS will shortly be starting a recommissioning process for the vast majority of our funded debt advice provision. This is with an aim of go live in newly commissioned services from April 2022.

Within this we will seek to ensure our funded services are high quality and built around the wants and needs of customers, ensuring they can pro-actively reach out to the full range of people who need support. MaPS will want to ensure we can help more people with the funds we have available, and we will seek to promote use of innovation such as video call, WhatsApp and webchat, which has been used so effectively in the pandemic. However, we will not overlook those customers who need face-to-face support and we will recognise that complex cases are an increasing part of the debt advice landscape. 

This is the first time for many years that the government-backed debt advice funds have been reviewed at scale and it is an exciting opportunity to ensure MaPS’ approach to funding services is as strong as possible. Done well, it will no doubt make a really positive impact for customers.

Working with our stakeholders will be a key part of this process. We are now concluding the various processes we must complete to get this work mobilised and then will be running webinars and requests for information from the sector in the next few months. I very much hope a wide range of stakeholders will get involved with these engagement opportunities. Please keep an eye on our social media channels and website for further announcements.  

Keep in touch

Learn more about MaPS work in the debt advice sector, including research, creditor engagement and funding.