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StepChange response to the Money and Pensions Service consultation

MaPS proposals for the delivery of its debt advice strategy

April 2024

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The Money and Pensions Service (MaPS) is an arm’s length body of government, sponsored by the Department for Work and Pensions (DWP). Under the Financial Guidance and Claims Act 2018 MaPS has a statutory function to ‘provide to members of the public in England, free and impartial information and advice on debt’. MaPS is funded to do this (and other functions) through a statutory levy on financial service providers and pension schemes.

While levy funding only accounts for around a quarter of debt advice funding, MaPS’ status as a public body gives it a larger influence over and responsibility to the health of the debt advice sector. So the outcomes of this consultation on MaPS’ proposals for future levy funded debt advice service delivery are important for debt advice providers, debt advice funders and people in need of debt advice.

The consultation comes against the background of rising debt advice demand and cost pressures on debt advice providers form the period of high inflation. It follows implementation of a new commissioning approach to allocating levy funding.

So there are key challenges for the debt advice sector that require detail and certainty from this consultation. While the consultation includes some interesting and stimulating thinking about advice needs, it leaves a number of key questions out of scope.

As a result key points from StepChange’s response include:

  • MaPS should stick tightly to the remit set out in the Financial Guidance and Claims Act 2018 to fund core debt advice services for those ‘most in need’ and ‘where provision is lacking’. This would include:
    •  Community based advice serving those with the lowest incomes and needs underserved by other funding
    •  Funding DRO intermediaries
    •  Investing in infrastructure that helps debt advice providers deliver better outcomes for clients or makes the sector as a whole more joined up and effective
    •  Advice services meeting specialist debt advice needs (like Mental Health Breathing Space and small business advice).
  • MaPS should reflect on the lessons of the recent commissioning round and replace the highly commercial and competitive commissioning approach with one that is better aligned to the needs of the debt advice sector. A more flexible model, which allows for genuine collaboration between providers in the interests of people in debt, is needed. MaPS should consider returning to a grant-based approach that allows greater flexibility, agility to change and open collaboration between providers.
  • Maps should develop a workable cost-effectiveness model and transparent reporting on debt advice outputs and outcomes. Without a firmer basis in cost-effectiveness and public data on debt advice outputs and outcomes now, there is no compelling way to evaluate the proposals in this consultation or make choices about the best use of levy funding to meet the need for debt advice.
  • We welcome the MaPS’ focus in the consultation on the wellbeing of debt advice colleagues and we provide thoughts and examples of ways debt advice providers can support colleagues.