THE announcement that North Ayrshire Citizen Advice Service (NACAS) is closing its doors after 20 year brings into sharp focus the critical issue of funding that advice agencies in Scotland are facing. It should also have alarm bells ringing at the Scottish Government and the Accountant in Bankruptcy (AiB).
It is not three years since the law was changed, requiring anyone struggling with debts to first obtain the advice of a licensed insolvency practitioner or approved money adviser before accessing a formal debt remedy. With local authority-funded money advice services under increasing pressure and news that the first, large, independent, council-funded service is to close, the fear is that many financially strapped consumers will not be able to access essential gateway services.
The situation in North Ayrshire illustrates this problem perfectly. Until now, there have been only three local authority funded services in the area: NACAS, North-Ayrshire Council and the North-Ayrshire Big Partnership project.
North-Ayrshire Council only provides money advice to existing social work clients; whereas the Big Partnership only provides it to certain vulnerable groups (single parents, those on low income and those who are in workless households).
With closure of NACAS, who will advise the rest of North Ayrshire? As Graeme Brown, Chief Executive of Shelter, recently observed in relation to our homelessness laws, like our debt laws they may be renowned but “legislation in itself is not the answer. It must be accompanied by resources and political will to make it work”.
Resources and political will are lacking. As local authorities strip back services to only those that are statutory, the question arises: which are statutory? Section 12 of the Social Work Act 1968 makes clear that councils are legally obliged to provide adequate levels of advice, guidance and assistance to residents on issues that affect their welfare.
Welfare reform, personal debt and housing must be three of the biggest. Failing further reform to debts laws, to remove the requirement to get advice first, the Scottish Government must address how money advice services are to be adequately funded.
There are options. The AiB service raised almost £12 million in fees from formal debt solutions to pay for staff and offices (also in North Ayrshire), which was more than the £11.72m spent on all local authority money advice services. £81m was then distributed to creditors. The only group that did not recover any costs for providing services, despite the Government’s policy of full-cost recovery, was local authority-funded money advice services, which just happen to be an integral part of the system.
Money advice services are hugely beneficial for local authorities; health services; local economies; and creditors, who often get better value for money than from a debt recovery service. They don’t pay enough for them and it’s not the responsibility of council tax payers to incur the cost of recovering bad debts. They simply have to pay more so that these frontline statutory services can be maintained.
Alan McIntosh,
52 Selvieland Road, Glasgow.
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