Independent Debt Advice

Debate between Catherine McKinnell and Lord Austin of Dudley

Tuesday 8th February 2011 Westminster Hall

[Catherine McKinnell]

I strongly agree; that is precisely the point that I want to make today. With no news of any funding beyond March, the service in Newcastle is winding down, and so are bureaux right across Tyne and Wear. The situation is deeply worrying because of the personal insolvency figures and also because people, particularly in places such as the north-east where more than 50% of the population is employed in the public sector, will find themselves in even more worrying financial circumstances.

[Ian Austin]

Areas such as my hon. Friend’s constituency and mine, which have been hardest hit by the recession and are taking the longest to recover, will be most affected by the cut. In the west midlands, 62 staff are employed as a result of the financial inclusion fund, including five at the CAB in Dudley, and the staff there told me that it is hard-pressed families, the most vulnerable and people with learning difficulties who have got themselves into debt, who rely most heavily on the services. They also told me that their clients will have absolutely nowhere to go if the funding provided by the financial inclusion fund is withdrawn.

[Catherine McKinnell]

I thank my hon. Friend for reiterating the point that I am trying to make, which is that the cut is ill thought through and ill-timed for places facing an uncertain financial future. Unemployment in the north-east is rising, youth unemployment is at a record high and one in three young people in my constituency are out of work, compared with one in five nationally. At the same time, public sector workers face redundancy, the VAT rise and increasing fuel and energy prices. People will only get into more financial difficulty. It is shocking that at a time when increased demand on personal debt advice services is inevitable, funding for those services should be cut. It is also of concern that we are likely to lose highly skilled and trained staff who have built up a wealth of knowledge and expertise in helping people. Eight staff members in Newcastle are being made redundant, which is deeply worrying and shocking.

As I am sure the Minister is aware, in February 2010, the National Audit Office concluded that the face-to-face debt advice funded by the financial inclusion fund delivered good value for money. Indeed, the NAO found that the financial inclusion fund project was helping more people at slightly less cost per person than originally planned, and that the advice given was well regarded by those receiving it. That has certainly been the case in Newcastle, where 90% of clients who filled out a feedback form said that they would recommend the citizens advice bureau debt advice service to somebody with debt.

I recently saw at first hand the excellent advice services provided by the CAB during a special advice service day at a local community centre in the west end of Newcastle, the area that suffers the highest levels of deprivation and personal bankruptcy. The CAB brought together a series of advice services under one roof and took them out into the communities suffering the most. It was an impressive and productive day, and I know that it helped an awful lot of people in my constituency.