Community Debt Advice Services

Karl Turner Excerpts

Wednesday 1st December 2021 Westminster Hall

[Yvonne Fovargue (Makerfield) (Lab)]

It is a pleasure to serve under your chairmanship, Ms Bardell. I congratulate my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) on her well-informed and passionate speech.

We know demand for debt advice services is high and likely to increase, because personal debt is soaring, because of rising energy and food bills, and the end of furlough and debt payment holidays. Those schemes did quite a lot to put off the problem, but it never went away. About 4 million low-income households in the UK are behind on their rent, essential bills and debt payments. That figure has grown threefold since the pandemic, and coupled with that, there have been big changes to the commissioning of debt advice. That was on 16 July, when we had hoped the pandemic was coming to an end, but it is probably still carrying on, so is this the right time for a new and completely different approach?

It is really welcome that MaPS is investing more money in debt advice, and I also welcome the fact that it is looking at the wellbeing of advisers. Debt advice puts a considerable strain on those advising: quite often, the people who come in are at the end of their tether. There was a black joke in the citizens advice bureau I worked at that when somebody came in with a bulging carrier bag, it was going to be a debt client, and the bag would be full of bills that people could not open. They had put them behind the clock until the clock fell off the mantelpiece, and then they would seek debt advice. That was not just those who could not cope, but people from all walks of life, including professional people. Debt has a particular impact on individuals. It often leaves people feeling shame that they are in this position and cannot do what they want for their families. That is wrong, but it is how people feel, and we cannot get away from it.

[Karl Turner (Kingston upon Hull East) (Lab)]

I know that my hon. Friend is an expert in this area, not least because of all of the years that she worked with the CAB. Would she say something about the importance of the holistic approach to advice? This is very often not just about debt, but other issues, including domestic violence. In my experience as a criminal lawyer, people often get into all sorts of difficulties as a result of other factors. Indeed, the problem is often that people have not been pointed in the right direction on issues such as the benefits that they are entitled to, but do not actually claim.

[Yvonne Fovargue]

I thank my hon. Friend for that intervention, and I will be moving on to discuss the wraparound provision, which does not just cover debt advice. We cannot just see debt as the problem: the important thing is the person who has the problem, and we have to deal with all their problems through that person-centred approach. It is no good just dealing with a person’s debt if they also have an employment problem or a housing problem that needs to be solved. We have to look at everything in the round.

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[Karl Turner (Kingston upon Hull East) (Lab)]

It is always a pleasure to serve under your chairship, Ms Bardell. I begin by congratulating my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy). Persistence pays off, because my hon. Friend has been incredibly persistent in securing this very important debate. I thank her very much indeed for that.

I want to begin by paying tribute to Unite the union. It is my trade union and I am very proud of its constructive campaign on this issue. I also want to thank Citizens Advice, a crucial organisation that is important to me and my constituents. For many years I hosted a citizens advice bureau clinic from my constituency office. It was incredibly busy. It was probably then that I recognised how crucial the service was. An array of people came to that clinic, but they were not what one might expect—somebody on the bones of their backside. The people varied. Some were in good, well-paid employment, often coming up against it and getting into real difficulty. As my hon. Friend said, it is true what people say that we are only two pay cheques away from such incredible difficulty ourselves.

I am incredibly proud to represent the constituency of Kingston upon Hull East, not least because I was born and bred there, but we have real difficulties in Hull. I think I am right in saying that insolvency in Hull is double the national average. In 2019-20, before the pandemic, I understand that the CAB saw 6,000 people for debt, 89% of them face to face. I did not intend to detain the House for very long, but I just want to make this one plea to the Minister. I pray in aid for his support in this: we need to pause, because we do not know—we cannot possibly know—what the result of the pandemic is in reality.

I think the Minister has the power to say to MaPS, “Let’s pause now. Let’s not do something that we will potentially regret later on.” I ask the Minister to pause the change, because it is obvious from the hon. Members who have spoken today that it is essential to stop it. I am not suggesting it is finished forever; it might be, but after a period of time and proper, decent consultation, we can revisit this idea. For now, I say to the Minister, “You have the power. Use it rightly and pause this now.”

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[John Glen]

I am grateful to the hon. Lady for that point. The significant concern that the outcome of the commissioning exercise will leave a smaller number of providers that are somewhat detached from local communities and specific needs must be addressed through the process. It would be undesirable for that detachment to lead to a lack of confidence in the new configuration, and MaPS will need to address that directly in how it responds.

When the outcome is secure, it is important that customers’ needs are diagnosed, that they have tailored support, and that providers collaborate to ensure that customers can be referred in a seamless manner when they can be better served by another service within the provision available. I recognise the point that that is not always possible if there is a level of comfort in a specific physical location. How that will be transferred efficiently needs to be looked at. MaPS has not dictated the channel through which advice needs to be provided, although it has required local provision in its regional lots. That is to allow bidders to innovate and compose a service that is aligned to MaPS’ requirements but is also informed by that intimate local knowledge, skills and experience.

A few people mentioned potential adviser redundancies. I will not be able to say anything more until bids are evaluated, and I think colleagues will understand that. However, we strongly encourage MaPS to take all reasonable steps to support the process and use its role as a market steward. That means supporting, where possible, any transfer of undertaking activities that the organisations involved may need to carry out to ensure continuity of employment for debt advisers.

[Karl Turner]

I thank the Minister for his incredibly constructive approach to the debate—we have all seen that. I do not expect an answer, but would he please, at least, consider asking MaPS to pause the process? We are all worried that we do not know the effects of the pandemic.

[John Glen]

I will come on to that in my final remarks. I want to give the hon. Member for Kingston upon Hull West and Hessle a few minutes to speak, but I have a few more paragraphs, if I may.

Where transfer of undertakings regulation does not apply, MaPS must ensure that successful bidders are aware of, and connected with, any skilled advisers and project staff who might be made redundant so they can be considered for new roles. The Government acknowledge that wherever services are subject to commissioning, there may be elements of uncertainty and change for the sector, as is the case with any new policy. The Treasury and the Department for Work and Pensions will ensure that the outcome of the MaPS evaluation and moderation exercise achieves value for money and meets the needs of vulnerable customers, in line with statutory requirements.

On the point made by the hon. Member for Kingston upon Hull East about a pause, I will reflect carefully on that and talk to my officials. There has been a delay in the decision about what would come forward, last Friday. Clearly, this is an incredibly complex and delicate matter. We want to ensure that the new provision meets changes in consumer demand from a commissioning exercise that had not taken place yet under these conditions, but it must also take account of the fact that our experience of the last 18 months is distinct from anything experienced before. That does not mean that we will say that there will be no change, but it means that the change has to be carefully calibrated and justified on the basis of the very real concerns that have been raised. I thank hon. Members from across the Chamber for their insights, which will inform the way I take the matter forward.