Debt advisers working in local Citizens Advice Bureaux and community-based independent advice agencies could soon be facing redundancy due to cuts in their grant funding from the Money and Pensions Service ('MaPS').  

Despite the cost-of-living crisis having led to rising demand and increasingly complex casework, MaPS funding for local services has been cut by 9% for the next financial year.  In real terms, with the costs of service delivery rising significantly, it is closer to 20%.  

A recent e-mail from the Head of Funded Services at Citizens Advice was leaked to us this week. The e-mail - sent to all chief officers of local bureaux and sub-contracted independent services – revealed that preparing for this cut has meant a freeze on adviser recruitment for several months already. That loss of capacity in the sector is criminal enough - having led to increasing pressures on a workforce struggling to cope with high volumes and with a lack of effective debt solutions at their disposal. But the e-mail went on to warn that the recruitment freeze has failed to deliver the savings needed and it is now  “increasingly likely” that Citizens Advice will “have to implement a programme of reducing the number of employed debt advisers across the service, which we know could result in compulsory redundancies.”

Making cuts to community-based debt advice services in the context of the cost-of-living crisis makes no sense even to most colleagues within MaPS. Recent discussions with these indicate they have no desire to see debt advisers made redundant.  So how has this crazy situation come about?

It appears that MaPS - which is an arm's length body of the Department for Work and Pensions - was incentivised by Government in recent funding rounds to allocate the lion’s share of its debt advice budget to new national contracts providing advice through digital and telephone channels.  This resulted in proposals last year to cut community-based services by 50%.  Howls of protest from the sector, as well as from wider stakeholders including local authorities, together with a campaign led by Emma Hardy MP in Parliament forced MaPS to back down.  

But by the time it did so, MaPS had already committed to expanding digital and phone services and was a considerable way through the commissioning process for those.  To rip up the process entirely and start anew – although the right thing to do - would have been hugely embarrassing for both MaPS and Government alike.  

Instead, MaPS eliminated one of its three proposed national contracts for Debt Relief Order ‘hubs’ and dug around for underspends that could be reallocated from its other budgets.  This enabled it to provide a temporary extension to the grants for community based services through to the end of 2022/23 on the same terms as previously (although there was no increase to help services cope with cost pressures). It also promised a full and proper consultation prior to making any changes to community based provision.  That consultation is expected to start in the latter half of this year and run through 2024.

Reading between the lines, it seems that MaPS gambled on Government coming to its rescue towards the end of this year. A relatively small additional sum of around £4 million per year for community-based services would have helped the sector cope with cost-of-living pressures and have avoided the need for cuts during the consultation period.  But this has not been forthcoming, and MaPS is now unable to cover the funding gap that has been created by it ploughing too much money into the contracts for national services.  If compulsory redundancies of debt advisers during a cost-of-living crisis are to be prevented, then the Ministers responsible for decisions about the MaPS budget– Laura Trott at DWP and Andrew Griffiths at the Treasury – will need to be persuaded to act urgently.

More fundamentally, the absurd position we find ourselves in is the result of a lack of effective consultation processes and leadership failings at MaPs. There are tentative signs of progress being made regarding both of these.  

The pre-consultation discussions held between MaPS and the front-line of debt advice, which include MaPS establishing Adviser Panels to inform its future commissioning, have been welcome.  Whilst there remains a need for greater transparency concerning the management information held by MaPS, and they still need to start reporting publicly on the quality of advice outcomes being achieved for people using different advice channels, it has also been acknowledged at a senior level that lessons have been learnt from the previous commissioning debacle.  

And there has been a change in the leadership team too. The previous MaPS Chair, Sir Hector Sants, has been replaced by Sara Weller, and within the management team the previous debt commissioning lead, Craig Simmons, has departed the organisation.  

Whether these changes will be sufficient to restore trust in MaPS amongst front-line advisers remains to be seen, but debt advisers are highly unlikely to want to engage constructively whilst the threat of redundancy is hanging over them.  

Protests are now planned for Monday, with the Unite Debt Advisers Network organising these outside DWP, HM Treasury and MaPS offices. Demands, which CfRC supports, include increasing the levy on lenders to pay for an expansion of community based services. Unless more funding is put into community-based services soon, it seems likely that dissatisfaction with MaPS could also lead to calls for its replacement.

Ultimately, however, we will also need to consider whether the commissioning of debt advice in a silo is an effective approach. People struggling with the cost-of-living do not just have debt problems. Many have 'clusters' of problems, with benefits, employment, housing and debt. This is not a recent revelation (see here for example). Co-commissioning with the funders of these other types of advice formed part of the MaPS predecessor body's strategy, but was abandoned without proper consultation in 2019. It needs to be put back on the table.

Mar 10, 2023

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