Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, how much funding his Department has provided to the Money and Pensions Advice Service for debt advice services in the (a) 2022-23 and (b) 2023-24 financial year; and what estimate he has made of the level of demand for these services in the same period.

Answered by Laura Trott - Chief Secretary to the Treasury

The Money and Pensions Service’s (MaPS) 2022-23 debt advice budget was £91.4m, with the majority of those funds allocated to free-to-client frontline debt advice delivery in England. MaPS’ 2023-24 debt advice budget will be communicated through the Financial Conduct Authority’s consultation, due to be published in April.

Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what criteria the Money and Pensions Service plans to apply to new contracts on debt advice to assess the outcomes of individual advice sessions; how those outcomes will be recorded; and whether it plans to use that information to inform future decision-making.

Answered by Laura Trott - Chief Secretary to the Treasury

The Money and Pensions Service’s Debt Advice Evaluation Research (Voice of the Customer) programme tracks the experiences of customers using its debt services from beginning to end via an outcomes survey. Participation is mandatory for suppliers and output forms overall performance monitoring and management. Insight gathered will support the evidence base for future debt advice commissioning.

Question to the HM Treasury:

To ask His Majesty's Government what plans they have to promote debt (1) advice, and (2) management, services across public services.

Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)

The Government recognises the vital role that debt advice and management services play in helping people in financial difficulty and vulnerable circumstances.

The Government Debt Management Function (GDMF) works closely with the debt advice sector through the Fairness Group to improve the way vulnerable debtors are identified and supported. This includes through improved signposting / referrals to the advice sector.

The GDMF has published the Debt Functional Standard, Vulnerability Toolkit and Economic Abuse Toolkit. These set expectations for government organisations to, where appropriate, signpost to external support services and debt advice.

To help people access debt advice, the Money and Pensions Service (MaPS) launched MoneyHelper in 2021, a consumer-facing service which provides free online guidance for people dealing with money worries and debt and connects people to free advice through its debt advice locator tool.

This year, MoneyHelper undertook a cost-of-living promotional campaign to increase awareness of its content for those struggling with rising cost of living pressures, including tools to support people with prioritising bills, talking to creditors and budget planning. As of the end of March, the campaign had generated around 85,000 additional online sessions.

MaPS also promotes the Money Adviser Network (MAN), a free partnership opportunity for organisations having conversations with people in financial difficulty. The MAN seeks to simplify how people access regulated debt advice, providing a single point of entry to a panel of free, high quality debt advice agencies. It now comprises more than 500 referral partners including DWP’s Debt Management and Universal Credit Service Centre, HMRC, Crown Commercial Services and the Child Maintenance Service.

MaPS also engages with the GDMF’s Fairness Group, supporting improvements to the government’s debt management practices including promoting the use of the Standard Financial Statement (SFS).

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make an assessment of the potential impact of the budget allocation for the Money and Pensions Service for community-based debt advice in the period between 2023 and 2025 on the number of compulsory redundancies of advisors; and whether he has had recent discussions with (a) the Citizen's Advice Bureau and (b) other providers on this issue.

Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)

The Money and Pensions Service (MaPS) recently extended grants for community-based debt advice for 26 months starting from 1 February, as part of a £76 million total package for debt advice services in England this year. The package includes three-year contracts to provide national and business debt advice and administration of debt relief orders and is expected to increase the volume of debt advice sessions.

As part of the transition phase of implementing the new grant arrangements and contracts, MaPS are in regular discussions with their funded providers, which includes discussions about resourcing arrangements. The Government continues to work closely with MaPS to monitor the transition to these new arrangements.

Question to the HM Treasury:

To ask His Majesty's Government what plans they have to ensure that public advice services for (1) individuals, and (2) households, struggling with debt are able to meet demand.

Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)

The Government recognises the vital role that advice services play in helping people in problem debt and vulnerable circumstances.

To help people in problem debt, the Government continues to maintain record levels of funding for free-to-client debt advice in England, bringing the 2022-23 debt advice budget for the Money and Pensions Service (MaPS) to over £90 million.

MaPS is the single largest funder of debt advice in England. It works alongside partners across the UK to make debt advice easier and quicker to access, and to improve standards and quality across the sector.

MaPS recently concluded a debt advice commissioning exercise with the primary aim of increasing the volume of debt advice available, as well as ensuring that such advice meets clients’ needs and proactively targets vulnerable and underrepresented groups. These contracts, once signed, will be starting from 1 February 2023.

To help people access debt advice, MaPS launched MoneyHelper in 2021, a consumer-facing service which provides free and impartial guidance for people across the UK. This includes budget planning and bill prioritiser tools, practical tips for engaging with creditors and a Debt Advice Locator Tool, which helps people find free, high-quality debt advice in their local area or via the telephone and online.

MaPS has also developed the Money Advisor Network pilot which enables a range of organisations including Job Centre Plus, local authorities and financial service providers to refer people for free to MaPS funded debt advice. The individuals referred can either proceed immediately to debt advice, request a call-back at a more convenient time or schedule an in-person appointment.

Question to the HM Treasury:

To ask Her Majesty's Government what steps the Money and Pensions Service is taking to help those in need of debt advice know where to seek it.

Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)

The Government is committed to monitoring and understanding personal debt levels in the UK, including the impact of cost-of-living pressures, and help individuals access appropriate guidance and support if they need help to get their finances back on track. Different organisations measure and define ‘problem debt’ in different ways. The Government monitors personal debt levels by working closely with the Money and Pensions Service (MaPS) , the Financial Conduct Authority and by engaging regularly with many other stakeholders on their research and findings.

MaPS undertakes an annual survey of Debt Need to understand how many people are facing financial difficulties and to better understand their characteristics, needs and preferences. The most recent survey indicated that 16% (around 8.5 million) of the UK adult population needed debt advice, with a further 20% (around 10.6 million) ‘at risk’ and likely to need help if their situation deteriorates.

To help people in problem debt, the Government continues to maintain record levels of funding for free-to-consumer debt advice in England in 2022-23, bringing this year’s debt advice budget for MaPS to over £90 million.

In addition to this, the Government launched the Breathing Space scheme in England and Wales last year. The scheme gives eligible people in problem debt who receive professional debt advice access to a 60-day period in which enforcement action is paused and most fees, charges and interest are frozen. Mental Health Crisis Breathing Space is an additional strand of Breathing Space that enables people receiving mental health crisis treatment to access the protections of the scheme for the full duration of their treatment, plus a further 30 days. In 2021, MaPS set up a single point of entry for the service and commissioned a dedicated pilot, delivered by Rethink Mental Illness.

The Government also continues to develop the Statutory Debt Repayment Plan (SDRP), a statutory agreement that will enable a person in problem debt to combine their debts into a single repayment plan, with payments made over a manageable time period, while receiving legal protections from creditor action for the duration of their plan.

To help people access debt advice, MaPS launched MoneyHelper in 2021, a consumer-facing service which provides free and impartial guidance for people across the UK. This includes budget planning and bill prioritiser tools, practical tips for engaging with creditors and a Debt Advice Locator Tool, which helps people find free, high-quality debt advice in their local area or via telephone and online.

MaPS has also developed the Money Advisor Network pilot which enables a range of organisations including Job Centre Plus, local authorities and financial service providers to refer people for free to MaPS funded debt advice. The individuals referred can either proceed immediately to debt advice, request a call-back at a more convenient time or schedule an in-person appointment.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will ask HMRC to examine individual cases where there is a dispute as to whether a service is provided by a managed service provider.

Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport

The Managed Service Companies (MSC) legislation, introduced in 2007, prevents the large-scale promotion of structures where workers work through companies that serve no commercial purpose beyond trying to achieve a tax saving.

The MSC rules require there to be an MSC provider, who is the promoter of these arrangements. It is not the case, however, that all clients of an MSC provider will necessarily be an MSC. HMRC guidance in the Employment Status Manual at ESM3510 sets out the criteria.

If a person disagrees with a tax decision made by HMRC, they have the right to appeal, request a review, or notify the appeal to the tax tribunal.

HMRC, will seek, wherever possible, to handle disputes by working collaboratively with customers. In any dispute, HMRC will seek to establish and understand the relevant evidence and facts as quickly and efficiently as possible.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what support he plans to provide for increasing Government-funded debt advice.

Answered by John Glen - Paymaster General and Minister for the Cabinet Office

The Government recognises the vital role that debt advice providers play in helping people in vulnerable circumstances. This is why the Government provided record levels of debt advice funding to the Money and Pensions Service (MaPS) for free-to-client debt advice provision in England in 2020/21 and 2021/22. The Government and MaPS remain committed to help individuals in problem debt get their finances back on track, especially as some now face new challenges in the shape of the sharp rise in inflation.

On 14 February, MaPS confirmed funding levels for debt advice services in England over the next three financial years. Its budget for the delivery of frontline debt advice provision in England has risen to £76 million for each of the next three financial years (subject to the usual annual budget setting by the Government), recognising an anticipated increase in the need for debt advice. This represents a significant increase from pre-pandemic levels of funding, which totalled £43 million in 2019/20.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps his Department is taking to ensure that agencies which provide debt advice to households receive sufficient funding to meet levels of demand.

Answered by John Glen - Paymaster General and Minister for the Cabinet Office

The Government recognises the vital role that debt advice providers play in helping people in vulnerable circumstances. This is why the Government provided record levels of debt advice funding to the Money and Pensions Service (MaPS) for free-to-client debt advice provision in England in 2020/21 and in this financial year. MaPS is one of the main funders for free-to-client debt advice in England, alongside other sources of funding for the sector, including from local authorities and via charitable donations.

On 14 February, MaPS provided an update which confirmed funding levels for debt advice services in England over the next three financial years. Its budget for the delivery of frontline debt advice provision in England has risen to £76 million for each of the next three financial years, recognising an anticipated increase in the need for debt advice. This represents a significant increase from pre-pandemic levels of funding, which totalled £43 million in 2019/20.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to Money and Pensions Service (MaPS) statement: update on debt advice commissioning of 17 December 2021, when she plans to make funding available to MaPS to extend contracts for existing providers of community-based debt advice services for (a) three months initially and (b) a further 12 months following the decision not to proceed with the regional lot.

Answered by John Glen - Paymaster General and Minister for the Cabinet Office

The Money and Pensions Service’s (MaPS) annual budget will be agreed as part of their annual budget negotiations with the Department for Work and Pensions and HM Treasury which are currently ongoing and will conclude shortly. This includes funding allocation towards provision of free-to-client debt advice in England.

The Government recognises the sector’s need for planning certainty and is working at pace with MaPS to provide further information to the bidders and the sector shortly.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, pursuant to the Answer of 21 January 2022 to Question 106695, on Debts: Advisory Services, what support is available until MaPS identifies a longer-term solution; and what his timeframe is for identifying a longer-term solution.

Answered by John Glen - Paymaster General and Minister for the Cabinet Office

The Government recognises the sector’s need for planning certainty and is closely engaging with MaPS as they work through the next steps including by making sure they are considering recent representations made by various stakeholders in the sector on how best to deliver locally based debt advice provision going forward.

The Government is working at pace with MaPS to provide further information to the bidders and the sector shortly.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment has been made by the Money and Pensions Service of potential job losses following its recommendation to reduce community-based debt advice funding provision by 50 per cent.

Answered by John Glen - Paymaster General and Minister for the Cabinet Office

Supporting people in problem debt is a Government priority. This is why the Government provided recorded levels of funding during the pandemic to the Money and Pensions Service (MaPS) for free-to-client debt advice provision in England.

The Government has also given MaPS a statutory duty to have close regard for vulnerable people and is working closely with MaPS regarding its next steps for local debt advice provision.

MaPS has not recommended a 50% reduction in community-based debt advice funding as part of its commissioning exercise. The evaluation of bids on the regional lot of their commissioning exercise was recently completed. The evaluation revealed concerns that the services being offered would not adequately meet the needs of people in vulnerable circumstances at the scale MaPS had hoped to achieve, or provide value for money. Therefore, MaPS will not be awarding contracts under the regional lot at this time.

The Government is working closely with MaPS to provide further information to the bidders and the sector shortly with regards to its commissioning exercise and next steps.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps she is taking to secure the future of face-to-face debt advice in the UK following the Money and Pension Services’ procurement exercise.

Answered by John Glen - Paymaster General and Minister for the Cabinet Office

Supporting people in problem debt is a Government priority. This is why the Government provided recorded levels of funding during the pandemic to the Money and Pensions Service (MaPS) for free-to-client debt advice provision in England.

The Government has also given MaPS a statutory duty to have close regard for vulnerable people and is working closely with MaPS regarding its next steps for local debt advice provision.

MaPS has not recommended a 50% reduction in community-based debt advice funding as part of its commissioning exercise. The evaluation of bids on the regional lot of their commissioning exercise was recently completed. The evaluation revealed concerns that the services being offered would not adequately meet the needs of people in vulnerable circumstances at the scale MaPS had hoped to achieve, or provide value for money. Therefore, MaPS will not be awarding contracts under the regional lot at this time.

The Government is working closely with MaPS to provide further information to the bidders and the sector shortly with regards to its commissioning exercise and next steps.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what discussions his Department has had with the Money and Pensions Service over the decision on recommissioning of new contracts for local debt advice services in (a) the North East, (b) North West and (c) Midlands; what his timeframe is for agreeing new contracts for those debt advice services; and what assessment he has made of the impact on local communities of the non availability of those services.

Answered by John Glen - Paymaster General and Minister for the Cabinet Office

The Government and the Money and Pensions Service (MaPS) are committed to creating a more resilient debt advice sector, which will drive better quality of advice and customer outcomes over the longer term.

As per their update of 17 December 2021, MaPS have evaluated the bids for the regional lot and concluded that the services being offered through submissions would not represent value for money or adequately meet the need of people in vulnerable circumstances. Over the coming months, MaPS intends to work closely with stakeholders to identify the best ways to deliver locally based debt advice provision in England and how best to procure these services on a longer-term basis. MaPS will provide more details on how they intend to carry out this engagement in the coming months.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will place in the Library any impact assessment undertaken on the recommissioning of the Money and Pension Service debt advice service.

Answered by John Glen - Paymaster General and Minister for the Cabinet Office

The Money and Pensions Service (MaPS) assesses debt advice demand and makes decisions about advice provision. MaPS’s statutory responsibilities include the need to consider the most vulnerable in its decision-making.

The Government cannot comment in detail on an ongoing commercial tendering process. However, the MaPS-led recommissioning exercise is expected to materially increase the amount of debt advice available to people in England, and ensure services – including face-to-face provision – are built around customers’ needs. The exercise is an important step towards a more resilient debt advice sector and will drive better quality of advice and customer outcomes over the longer term.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the number of face to face debt advisers who will be available for appointments with clients after the proposed recommissioning of the Money and Pension Service debt advice service in 2022, compared to the current number of advisers.

Answered by John Glen - Paymaster General and Minister for the Cabinet Office

The Money and Pensions Service (MaPS) assesses debt advice demand and makes decisions about advice provision. MaPS’s statutory responsibilities include the need to consider the most vulnerable in its decision-making.

The Government cannot comment in detail on an ongoing commercial tendering process. However, the MaPS-led recommissioning exercise is expected to materially increase the amount of debt advice available to people in England, and ensure services – including face-to-face provision – are built around customers’ needs. The exercise is an important step towards a more resilient debt advice sector and will drive better quality of advice and customer outcomes over the longer term.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the number of face to face debt advice appointments that will be available to people in England after the proposed recommissioning of the Money and Pension Service debt advice service compared to the number of those appointments currently available.

Answered by John Glen - Paymaster General and Minister for the Cabinet Office

The Money and Pensions Service (MaPS) assesses debt advice demand and makes decisions about advice provision. MaPS’s statutory responsibilities include the need to consider the most vulnerable in its decision-making.

The Government cannot comment in detail on an ongoing commercial tendering process. However, the MaPS-led recommissioning exercise is expected to materially increase the amount of debt advice available to people in England, and ensure services – including face-to-face provision – are built around customers’ needs. The exercise is an important step towards a more resilient debt advice sector and will drive better quality of advice and customer outcomes over the longer term.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he made of demand for face to face debt advice when recommissioning the debt advice service of the Money and Pensions Service.

Answered by John Glen - Paymaster General and Minister for the Cabinet Office

The Money and Pensions Service (MaPS) assesses debt advice demand and makes decisions about advice provision. MaPS’s statutory responsibilities include the need to consider the most vulnerable in its decision-making.

The Government cannot comment in detail on an ongoing commercial tendering process. However, the MaPS-led recommissioning exercise is expected to materially increase the amount of debt advice available to people in England, and ensure services – including face-to-face provision – are built around customers’ needs. The exercise is an important step towards a more resilient debt advice sector and will drive better quality of advice and customer outcomes over the longer term.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether he has had discussions with relevant stakeholders on the potential effect of the timeframe for the recommissioning process for debt advice services on the ability of smaller debt advice organisations and charities to (a) lead bids for one of the three proposed regional debt advice services and (b) become a delivery partner in joint bids; and if he will make a statement.

Answered by John Glen - Paymaster General and Minister for the Cabinet Office

The Money and Pensions Service (MaPS) assesses debt advice demand and makes decisions about advice provision. MaPS’s statutory responsibilities include the need to consider the most vulnerable in its decision-making.

Information on the bids received as part of MaPS’ procurement process is commercially sensitive while that process is still ongoing, with it being set to conclude early in 2022. However, the procurement exercise is expected to materially increase the amount of debt advice available to people in England, and ensure services – including face-to-face provision – are built around customers’ needs. The exercise is an important step towards a more resilient debt advice sector and will drive better quality of advice and customer outcomes over the longer term.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the potential effect of the proposed (a) increase in digital and (b) reduction in community face-to-face debt advice provision under the Money and Pension Services proposed recommissioning model on the adequacy of the levels of face-to-face provision of debt advice for people who (i) are digitally excluded and (ii) have difficulty accessing advice over the telephone as a result of (A) complex mental health issues, (B) disability and (C) language barriers; and if he will make a statement.

Answered by John Glen - Paymaster General and Minister for the Cabinet Office

The Money and Pensions Service (MaPS) assesses debt advice demand and makes decisions about advice provision. MaPS’s statutory responsibilities include the need to consider the most vulnerable in its decision-making.

Information on the bids received as part of MaPS’ procurement process is commercially sensitive while that process is still ongoing, with it being set to conclude early in 2022. However, the procurement exercise is expected to materially increase the amount of debt advice available to people in England, and ensure services – including face-to-face provision – are built around customers’ needs. The exercise is an important step towards a more resilient debt advice sector and will drive better quality of advice and customer outcomes over the longer term.