Debt advice scheme saved

Published on Friday, 18 February 2011 11:22
Posted by Scott Buckler

Ministers have scrapped plans to discontinue a scheme aimed at helping people stay out of debt following intense lobbying from the National Housing Federation and other campaignersThe Federation warned of the impact cutting this vital service could have on thousands of low income families and their concerns were voiced in the national press.This week the Government announced a reprieve for the fund which costs £27m per annum, backtracking on plans to make over 500 redundancies.


The Financial Inclusion Fund provides free face-to-face debt advice to vulnerable people with acute financial problems.Debt advisers funded through the scheme help 100,000 people with complex debt issues each year, including representing clients' interests to lenders. The 500 specialist debt advisers, based in Citizens Advice offices and community halls around England and Wales, had already been sent redundancy letters as the Government planned to terminate funding for the scheme at the end of March.

Providers had also been told to stop taking on any new clients, other than those with the simplest problems.The Federation lobbied against the axing of this fund, claiming that the move could ultimately leave many people across the country at risk of falling into an inescapable spiral of debt and succumbing to predatory loan sharks.The Federation’s concerns secured a significant amount of coverage, appearing in the Observer and the Independent.

This week, the Department for Business managed to secure the funding of the scheme for another year, finding money from a contingency fund.

Federation assistant director Paul Rees said: 'We welcome the Government’s change of heart on the funding of this scheme and are encouraged by the fact that ministers are clearly listening to organisations like the Federation.’

 The continued running of the Financial Inclusion Fund for at least the next year will help thousands of families to climb out of debt and avoid being exploited by doorstep lenders and loan sharks.The challenge now for Government is to find the additional funding needed to secure the future of this vital service up to 2015.'

Source: ©NHF

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