Debt Advice. Keep it Face to Face

As society becomes more unequal, more of us borrow just to get by. People don’t only borrow money or credit, but also tend to lend and lease advice on how to manage the situation we face. Im not talking here about the numerous blogs on Cost of Living with hints and tips on how to trim the pennies. More the kind of structured, professional advice needed in order to make a plan to repay debt, when the odds are stacked up. In the very short-term, the best we hope for is that those loaning this advice will treat us as equals. 

For the majority of traditional advice services this is the case. Whether it be local council, Citizens Advice and other free money advice services. Advisers stationed there will not pass judgement on anyone who shows up to unravel their debt woes, however complex they might be. Never mind the story, the adviser wants to see a person leave with a renewed degree of security and prospects for comfort, warmth, food; whatever might be required.

I'm writing this week to share concerns that this free advice sector is once again under threat of cuts. Particularly the branch of free financial and fuel advice which is delivered in our neighbourhoods. And all of this whilst debt advice services experience the highest demand in an era.

This year in Glasgow, Quite a few people i recognise as activists, have started work as Advisers for Citizens Advice and other free legal advice services. It’s a good fit. I'm not simply out to praise these friends, what i have to say is very earnest. What i know about these people is they have campaigned against austerity, for better housing, migration and working rights. They aren't the fast-talkers, they listen hard. They are normal people, well placed to see the connection between the welfare safety net and the factors hindering it from working properly.

As with most working class people in the advice sector, a large proportion of experience comes from navigating their own circumstances during calls to Scottish Power or the DWP or rapidly gathering the evidence to be referred for a Scottish Welfare Crisis Grant. Once you've mastered your own stubbornness and patience you can advocate for others.

As I said, it is just an observation that there are some people with a decent set of experiences who recognise the value of community based advice services. And I think in a few short years the trajectory for being someone who gives welfare advice as well as receives it has changed. It is a generalisation but during the last 5 years, the gap between those experiencing poverty and those giving guidance through such circumstances has narrowed. It is of course the case that the harshest ends of poverty remain weighted heavily still towards one corner of society.

I suppose it is a cliche example to cite 'I Daniel Blake' here, but it is a well recognised marker and a useful one to point to. And I'm not afraid to example a film in this context when it is one founded on realism. In 2017, It surpassed some viewers expectations about generating a new sense of empathy in them, for working class experience. For a journey that was fairly standard at the time, but hidden from view. A story of trying to get Employability Support Allowance; Daniel was not fit for work after a heart attack but forced to pursue that course nonetheless. The dehumanising benefits system has changed remarkably little (Though ESA assessments have). But imagine how hard hitting a piece of cultural output would need to be now, to retain the specific experiences of Daniel and other characters, whilst showing how this hardship has been doubled. And furthermore whilst also encompassing a reflection of the expanded general sense of despair which the cost of living crisis has borne out on it's viewers. I know this sounds a bleak hypothesis, but there is a grain of hope in there too that a kind of merging of experiences is taking place.

I don't remember 'I, Daniel Blake' featuring a debt adviser. A neo-realist film for today would have one character like that.Their storyline would be their fight to retain their job too. I’ve spoken to advisers who have 20 or more years experience in the job. They are like veterans of the advice services. Today they paint a striking picture, but one which I imagine will not surprise Common Weal readers. This entire sector of personal financial advice is being shaped by trends in fuel (Electricity and Gas and forced prepayment fittings) as well as crucially by debt.

I'm not ashamed to say I’m also experiencing debt unlike I’ve known for more than a decade. I will assume this is the same for a significant proportion of people in Scotland. So why am i focussing on debt advisers here? Well it looks like campaigns are brewing to defend their jobs in our communities.

The outlook ahead

We know interest rates are causing major pressure on our bank balances. We must tackle interest rate hikes by taxing unnecessary wealth and challenging the profit making of companies such as those that manage our energy supply (British Gas, EDF, ScottishPower etc.) 

But as Joe Cox of Debt Justice explains, the situation when it comes to personal debt- is so severe- that even these measures combined with strengthened workers rights; increasing the minimum wage and welfare payments, wouldn’t be enough by themselves to reverse the un-manageable debt people are falling into. 

All those struggles are vital to ending the debt crisis but we will also need to give people the routes to manage - and in many cases - write off unaffordable debt. First personally and then at scale.

In Scotland, a changing attitude toward debt has been reflected in the ‘Feed the Weans’ campaign demanding that the council erase school meal debt in Glasgow. The campaign has now turned their attention to making school meals free for all pupils in Scotland and driving progress on the issue. 

This particular campaign took root locally. Campaigners where able to identify patterns which not only showed why the debts were unmanageable for families and schools , but they went on to question the legitimacy of the debt itself within the national context.  

What we are seeing regarding the Scottish Government approach to cost of living and fuel payments is almost an inverse of this ‘local knowledge first and then scale-up to universal’ approach.

The Scottish Government has announced a wave of new measures aimed at alleviating spiralling debt. A supposed tripling of the ‘Fuel Security Fund’ to £30 million makes big claims it will support ‘tens of thousands of households’ through the next stage of the energy crisis.

However, there are just 4 main beneficiaries of this fund. These are: The Wise Group, Advice Direct Scotland, Fuel Bank Foundation and Scottish Federation of Housing Associations. 

So as welcome as this funding announcement is, the advice services it will fund are those that primarily conduct services nationally and via telephone and online consultations. The latter three in the list are already core partners of the Scottish Government Programme . As far as i understand they’ve been given an expanded role. 

This comes at the precise moment that a relatively small ‘debt advice levy fund’ which had previously been allocated to the Community Based Free Debt advice services has been erased. Mike Dailly of the Govan law Centre outlined how this choice is unsettling the advice sector from a Glasgow perspective. Its very worth reading the article in detail as Dailly picks apart how it was that a lifeline of £6 Million for these services was not renewed.

The levy had funded face to face advisers who were stationed at Citizens Advice Bureaux, Independent Money Advice Centres, Community Law Centres and other counselling services of varying sizes, mostly on high streets, in highly deprived areas. 

These are places you can walk into via a shop front, sit down and be listened to in front of a real human being. 

Many of these same services can give very specific advice on fuel costs and savings because they understand the kinds of housing tenure and local resources that exist in the neighbourhood. These advisers are not reading from a script.

These are quiet cuts

What’s important to know is that community-based debt advice services have already been hit by cuts in multiple waves, I was aware of that happening here in Glasgow in 2020, during a moment where Local Authority funding was basically just totally messed up. It is very likely to have been similar where you live. So a £6 Million cut sounds like little but was one of a remaining lifelines remaining.

There are four reasons why you may not see headlines about these cuts in very recent weeks:

1. The Scottish government put its ‘good news’ story at National level, this by its very nature disguises the local implications of where money is being spent in your region. 
2. Any cumulative build up of cuts over a series of years is very difficult to trace, without campaigners or journalists willing to compile the information.
3. The allocation of funding from UK Government to be administered in Scotland often by outsourced partners and this in itself another complex layer in the process.

These three factors all indicate a concerning lack of transparency while the advice sector is being rapidly centralised by both of our Governments. 

The last reason tells us most about the situation and what is to come next:

4) People who are struggling with personal debt, the threat of disconnection or dispossession have enough on their plates to deal with already. Though they have the experience to advocate for more local services, for the most part they don’t always have the capacity to get involved in anti -cuts campaigning. 

Citizens Advice Scotland published that their demand for crisis financial advice has risen by 40% this year. Amongst these were also increases in requests for support with food insecurity and crisis grants. 

It is quite likely that this number will increase further. In fact we should assume most people in serious debt situations haven’t yet reached out to ask for advice through formal agencies or charities. As Citizens Advice also explain, the demographics of who is impacted are widening substantially to include primary groups of single working age people, and those in Social Housing. 

For example a single woman in her 30’s, who is re-entering a cycle of debt similar to what she previously encountered in her late teens, may not be aware that her outgoings now are actually much higher than they were 10 years ago. Her wage may appear relatively ‘stable’ compared to what it was back then and she is hopeful energy prices will come down swiftly. 

Similarly a single pension aged man who lives in Social Housing and has never been in debt before is simply slipping behind on a range of payments. He may be struggling to come to terms with the reality, needing to seek help for the first time, he is likely to feel anxious unable to shake a sense of humiliation, though getting financial advice is anything but shameful. 

Why debt advice in the community?

Some people will argue that the Scottish Government has identified the correct response to make only select organisations the single point of contact for advice. I would argue that the exact opposite is true. We will hear ministers bigging up the efficiency of these services, quoting the number of clients guided through the pipeline and playing down the fact that most conversations are taking place over the phone. The word 'tailored' will be used a lot. 

There is one feeling that is familiar to anyone at the behest of a creditor or lender: Debt feels incredibly lonely. The voice who sets the terms of what you owe, what interest is accruing and what the timescale of repayment is, that voice has a great deal of control over you. We have an overwhelming culture that 'to owe someone something, is a singular burden only you must carry. The tools to resolve it are yours alone and those tools require you to undergo personal development of some kind.’  

Our economy is built on this attitude, our mental health crisis is accelerating because of it. Advisers make clear that clients with complex needs and mental health issues, largely benefit from the prospect of a face to face appointment, one they could walk to rather than be in a phone queue for. And those clients are more likely to take action afterwards if it is locally delivered. It might be as simple as that person filling the form for a fuel voucher whilst in the shop.

An adviser who knows their client is more likely to be able to help that person actually write off debt. Something which takes work and is a huge achievement. Online technology is grand but people actually understand what process they’re going through when they are part of filling the forms at a desk with letters being photocopied before their eyes. 

A person who knows their client is more likely to know if something else seems the matter this week and ask: ‘are you ok?’. An adviser who knows their client is far more likely to stay in the job when they see an improvement in their client’s life. 

The last thing we need are the big agencies realising they’re unable to help someone sufficiently  at a remote distance then referring people with complex cases to community advisers when it’s very late down the line.

And time is a factor because people are desperate. One of the key risks at the moment are a large number of rogue debt advice agencies promoting themselves on Tik Tok and Instagram. They are becoming more prolific all the time. Many offer services to be the ‘middle-men’ to supposedly help people access IVA’s, which is a financial measure to avoid bankruptcy by consolidating debt repayment. WARNING: An IVA is really only applicable to people in really specific circumstances and can make you much worse off if you’re not advised throughout by a registered advice team. The market is full of crooks who are exploiting vulnerable people from this current situation.

That’s also why strengthening community-based debt advice is such an important step in Scotland. Since places like Citizens Advice Bureaux or community law centres can help people navigate out of such situations with direct legal advocacy. 

There will be a call for more funding for free debt services in communities. Its likely to come forward from several groups in Scotland. I will be joining it. yes, partly because I believe in local relationships over monitoring and tracking. But I also see this as a practical step to oppose centralisation when it just wont work as well for people who deserve a system of support that works. It is quite frankly life and death.

These days fewer and fewer individuals will release themselves from debt quickly, those able to make a fresh start will have a longer journey to get there. There are fewer ‘open and closed cases’ as this brilliant Blog by Ames Taylor makes clear: https://amestaylor.medium.com/why-debt-advice-is-now-a-never-ending-story-c51bedbf6efa

For that exact reason, I think we should be funding the hell out of local advice services, to train people to be equipped with the patience, and perseverance to provide this type of support. To spread the workload pressures and provide respite for advisers who can operate in larger teams. 

This £6 million Advice Levy fund should be reinstated for community services. But I’d like to see much more funding on top, to offer training to debt advisers to become spokespeople for the emerging patterns they witness on the frontline. The community based services should be aspired to workplaces by those in the call centres, and recruiting people with direct experience of debt is vital.

After all, advisers may hold some of the best solutions to how we begin to reform the welfare state and how we begin to change the nature of our conversation around debt. The Government does have a role to play, we must see more of a steer towards the ministerial departments being accountable for our quality of life. And organisations like Trade Unions, Independence campaign groups, Common Weal, Debt Justice, Unite Debt Advisers and Power to the People amongst others, must help shape the narrative around debt as something to collectively overcome, not be personally ground down by.