StepChange responds to Money and Pensions Service’s debt advice strategy consultation

^{8 April 2024}

StepChange Debt Charity has today submitted its response to the Money and Pensions Service (MaPS) consultation on proposals for the delivery of its debt advice strategy.

StepChange agrees that there is a clear need for a compelling and comprehensive strategy to support the debt advice sector’s response to the challenges it faces. Demand for debt advice is rising, there is growing financial pressure on both consumers and debt advice providers, and people are coming to debt advice with multiple needs and circumstances that make quick and conclusive resolutions to their debt problems harder to achieve. 

StepChange has concerns that while the consultation makes a thoughtful contribution to where the need for advice is, it does not then follow through with a delivery strategy on how to tackle this need. StepChange has also identified several key discussion points that need to be addressed fully in order to meet the challenges facing the sector.  

There is firstly a need to interpret MaPS’ remit, set out in the Financial Guidance and Claims Act 2018, to fund services for those ‘most in need’ and ‘where provision is lacking’, including community-based advice, DRO intermediaries and specialist debt advice services. StepChange would like to see MaPS set out a delivery strategy for a ten year period, which would allow providers and other funders to put long-term plans in place. We would like to see MaPS avoid duplicating provision that already exists and commissioning services likely to rival or undermine existing services. 

We are concerned that the move to a highly commercial ‘winner takes all’ contract-based system of commissioning creates the risk of a cliff edge for providers. MaPS funding should add value to the majority of debt advice funding by joining up debt advice services and filling gaps that leave some people needing debt advice underserved. However, it is not clear that commissioning has significantly increased capacity or given better incentives for debt advice providers to work together at a time when servicing increasing demand requires cooperation across the sector. 

StepChange would also like more visibility of the value that current contracts and grants are delivering and is urging MAPS to focus on developing a workable cost-effectiveness model and public data reporting as a foundation for any next steps in its debt delivery strategy. Without this it is hard to evaluate the ideas set out in the consultation.  

StepChange CEO Vikki Brownridge said: 

“We welcome the opportunity to respond to MaPS’ consultation. At a time of such enormous financial turmoil for so many households, the pressures on the debt advice sector have rarely been greater, not only in terms of meeting demand, but also offering the best support possible while expanding capacity to ensure everyone who needs help receives it. 

“Clearly, there is a need for bold, strategic choices about how the scarce resources available can best be allocated to get the most out of the debt advice services MaPS funds. Our feedback to the questions posed in this consultation offers some challenge to the proposals included and we look forward to continuing to engage in constructive and collegiate discussions with MaPS and the rest of the sector through the through the Debt Advice Reference Group in the coming months. 

“We are eager to support MaPS in developing a successful delivery strategy for levy funding that works alongside the broader funding environment and contributes to a better debt advice sector for everyone who needs it.” 

Notes to Editors

• You can find StepChange’s response to the MaPS consultation here
• MaPS’ call for evidence for its consultation can be found here