Post by nickd on Mar 11, 2012 21:24:34 GMT 1
Some new concerns are emerging over the effectiveness of the Money Advice Service
We take a look at the (MAS) Money Advice Service v the work of organisations such the CAB who provide specialist debt advice under legal aid.
First let's have a look at some recent criticism levelled at MAS
"Criticism: MAS chief executive Toby Hobman received a pay package worth £350,000 for running an organisation that has hardly got off the ground"
Jeff Prestridge from the 'This is Money' financial website delivers his verdict on the Money Advice Service - 10th March 2012
"Perhaps the Money Advice Service will come good at some stage, but so far it has done little to convince me it is the right organisation to help consumers get to grips with their finances.
Four months ago, Financial Mail reported on the shambolic start MAS had made to life as a provider of free financial information to consumers. Just seven months after rising from the ashes of the Consumer Financial Education Body, MAS said it was axeing nearly half its staff as it sought to deliver more of its information and advice over the web rather than on the phone.
It was an extraordinary U-turn for an organisation entrusted with a budget of £44million a year – funded by consumers through a levy paid by banks, building societies and financial advisers.
Then last December the MAS’s reputation was dealt another blow when the Financial Services Authority, which oversees it, announced it was appointing John Spence to the MAS board.
As readers with long memories will know, he oversaw rampant mis-selling of high income equity-linked bonds at Lloyds in the late Nineties and early last decade. In 2003, after a £1.9million fine and bill for compensation of £100million, Spence was forced to admit he was ‘very sorry’ for the bank’s behaviour. These are hardly suitable credentials for a seat at the MAS board.
As I wrote at the time: ‘What MAS needs on its board are people who are passionate about delivering much-needed financial help to millions of households who are struggling like never before. Spence doesn’t fit that bill.’ He still doesn’t.
Last week, it was the turn of the Commons Business Select Committee to turn its gimlet eye on MAS when it published a report into debt management. Although the main conclusions were centred on the poor regulation of payday lenders and debt management companies, it didn’t spare MAS on any front.
The committee questioned its role, especially in the area of debt advice where Citizens Advice already does a splendid job. It also challenged MAS’s commitment to face-to-face advice, especially in light of the job cuts.
But the biggest criticism was reserved for the £350,000 package chief executive Toby Hobman receives for running an organisation that has hardly got off the ground. The committee said: ‘At a time of pay restraint, we do not believe that the head of a comparatively small organisation should receive a salary £100,000 in excess of the Prime Minister. We look to the Government to raise this with the FSA as a priority. The perception of such extravagance does not sit easily in an organisation tasked with helping those in debt.’
Hobman has made a pig’s ear of getting MAS off to a sound start. So let me give him a little advice: Mr Hobman, You could go a long way to turning round your organisation’s reputation by applying a voluntary hair cut to your grotesque pay. Your call."
Read more of Prestridge's damning indictment of the Money Advice Service here
www.thisismoney.co.uk/money/article-2113075/JEFF-PRESTRIDGE-A-helpful-hint-troubled-advice-service.html?ito=feeds-newsxml
The relevance of MAS to the current legal aid bill
Let's not forget that this news comes shortly before the House of Lord's votes on whether legal aid should remain within the scope of the scheme for those who need advice and assistance with a personal debt problem. The House of Lords are due to debate this on Monday the 13th March in the 3rd day of the report stage of the Legal Aid, Sentencing & Punishment of Offender's Bill.
Government has invested significant sums of money in to the Money Advice Service, but is it really an effective remedy and why chose it over and above the Citizens Advice Bureau & other agencies who seem to be doing 'a splendid job' according to a Commons Business Select Committee?
The Department of Business, Skills and Innovations regard Citizens Advice as 'value for money'
Why don't we just keep legal aid funding for the CAB to provide specialist debt advice and other not for profit agencies too?
Indeed, the Department for Business Skills & Innovation (BIS) commissioned an independent value for money review of Citizens Advice and Citizens Advice Scotland in October 2010 which seems to give nothing but glowing praise for the work of Citizens Advice Bureau.
Amongst its findings it states:
"Overall English and Welsh bureaux saw 2.1m clients with 7.1m advice issues and a survey of a large sample showed that 95% were satisfied with the advice received. For Scotland,
the corresponding figures were 269k clients (2008/09) and 545k advice issues (2009/10) and a satisfaction rate of 93%, with the additional information that 98% of clients would recommend the bureaux to friends. About 40% of those surveyed in Scotland had used a bureau at some stage. The top issues for both organisations are debt/benefits which together make up over 55% of all issues. Next come employment and then housing."
"Face-to-face advice remains the keystone of the approach to dealing with clients, and the one that is considered essential in many cases, although it is increasingly replaced or supported by other channels, as described below. "
"Under the Financial Inclusion Fund 74k financially excluded clients received debt advice from bureaux in 2009/10 and 60% of them had achieved a positive outcome by the year end, mainly debts rescheduled and income gained"
"The nature of this activity by Citizens Advice and Citizens Advice Scotland does not appear to have changed since the last review, although the scale and complexity of the issues have
increased. Each organisation can point to changes in policy beneficial to members of the public which they had a hand, to a greater or lesser extent, in bringing about. Some examples are..
• Following pressure by Citizens Advice and Citizens Advice Scotland, DWP provided free phone lines for mobiles to all 70 of its main help desks
• Banks installed 419 non-charging cash machines in low income areas following a joint Citizens Advice/Citizens Advice Scotland campaign, giving easy access for around 1m bank customers
• Following extensive lobbying by Citizens Advice Scotland a new route into bankruptcy was provided in primary legislation. This benefited 8400 Scottish debtors in 2009
• Campaigns against the closure of DWP offices met with success in protecting public services
• HMRC announced changes to staff guidance on debt collection practices after an effective Citizens Advice/Citizens Advice Scotland lobby
• Citizens Advice/Citizens Advice Scotland pressure brought a government policy change to provide a more effective safety net for tenants if a landlord’s property was repossessed for mortgage arrears Citizens Advice and Citizens Advice Scotland are widely known to policy makers in government, in business and commerce, and to opinion formers, including MPs and the media. Most government departments considered that Citizens Advice, and where relevant Citizens Advice Scotland, had been influential in consultations on policy development, and identifying where policy needed to change."
"BIS core funding has achieved value for money."
The BIS report must surely be read as a clean and commendable bill of health for the work of the Citizens Advice Bureau. Report the report in full here
www.bis.gov.uk/assets/biscore/consumer-issues/docs/b/11-520-bis-independent-review-citizens-advice
The Money Advice Trust pull no punches over the importance of debt good quality advice
Here are a few of the quotes in their 2010/11 report
“Good advice is worth every penny we can possibly spend on it.”Baroness Wilcox, Under Secretary of State, House of Lords
3rd May 2011
"The problem we are tackling is stark. Problem debt affects
around 5 million people across the UK. Its consequences can be
as severe as eviction and even suicide; for many more people it
exacerbates poverty, mental health problems and vulnerability."
Joanna Elson OBE CDir
Chief Executive
Read the Money Advice Report here
www.moneyadvicetrust.org/images/Impact%20Report%20Final%20Draft.pdf
Potential problems with external delivery drivers
Few of can have escaped the blaze of adverse publicity concerning A4E and the welfare to work contracts they hold with government. These are currently under investigation by the DWP and Margaret Hodge who chairs the Public Accounts Committee is calling for all of A4E's contracts with government to be suspended until the outcome of the investigations are known.
A4E is a key 'delivery driver' in the Money Advice Service and some may therefore question whether it is right to consider the Money Advice Service as a viable alternative to legal aid funding (which currently is at risk of being severely cut back if amendments to the Legal Aid, Sentencing & Punishment of Offender's Bill are not passed by the House of Lords when they vote on this crucial issue on the 13th March 2012). Advice agency funding is in a state of limbo and the latest developments with A4E (who take up large chunks of advice sector funding) potentially throw further delays into the equation when it comes to finding alternative cabinet office solutions. It strengthens the case for continued legal aid funding because the alternatives are likely to become even more protracted and unresolved. You cannot vote legal aid out when there is no alternative on the table.
Here's a an extract from A4E's website and Mark Lovell's comments on their involvement with MAS (Lovell being one of the A4E staff hauled over the coals by the Public Account Committee in to Flexible New Deal contracts):
"You may have seen recent announcements in the media about the launch of the Money Advice Service. I am delighted that A4e was chosen as a key delivery partner and, since April, we have been delivering the new face to face aspect of this service. The launch yesterday introduced the online and phone services. Open to all, the service will give clear, unbiased advice on financial issues. Over 6,500 people have accessed the support so far and our advisers have been doing some wonderful work. Over 4,500 of the customers are classed as ‘financially vulnerable’ and they have been using the service to both better understand and improve their financial position.
It was nice to attend the launch of the national service in Westminster (yesterday evening), following the press launch on the BBC of the online service). I was able to share some of our case studies with the MPs and MAS staff at the event. Since the service is accessible to everyone, our advisers are helping a range of people – pensioners and students, people just made redundant, long term unemployed people, many in work and even whole families. They are helping people with queries on mortgages, insurance, savings and debt- and their work has recently help keep one customer out of jail with the support on offer.
The online service is here and will soon feature on the A4e website. It is designed for a very broad audience – whether you are working and looking to better manage finance or make an investment, or are in debt and struggling with money, it aims to provide information and signpost."
Read more about the MAS/A4E connection here www.mya4e.com/2011/06/09/money-advice-service/
Mylegal view
The Money Advice Service is regularly promoted on television in what I assume to be expensive advertising campaigns. What concerns me is the substance behind all the media hype. I have tried to use the Money Advice Service website to see how effective it really is and ironically it seems to refer you back to the CAB when you enquire about the need for what I would call 'real' advice. CAB holds the majority of legal aid debt contracts, others are held by Shelter and some other smaller agencies too; - they all work to a common aim under the not for profit sector. It seems wholly appropriate to continue to allow truly not for profit agencies to provide specialist debt advice under the legal aid scheme - you simply cannot profit out of people being in debt.
What we offer under the specialist help scheme funded by legal aid is exactly that; - it is specialist work. The Ministry of Justice consistently draws attention to how CAB only receives 15% of its overall funding (applied nationally) from legal aid. To me this makes complete sense as it illustrates that a certain volume of our work is specialist and needs the intervention of a skilled paid caseworker to sort out a client's debt problems, it often requires the need to identify other areas of advice where intervention may be appropriate, such as sorting out benefits or the client's housing problems. This is where many agencies collectively work together to provide the holistic range of services which CAB and other not for profits are renowned for.
We are the specialist division of CAB and I remain far from convinced that a service such as the Money Advice Service offers anything by way of a satisfactory alternative to the very good service we offer. We have advised people on debt and benefit problems for years, we know what we are doing and as the noble Baroness Wilcox points out 'good advice is worth every penny we can possibly spend on it. It is a false economy to say we have not got the pennies when we are likely to see pounds being foolishly spent on repairing the resultant damage.
We are for instance, skilled and competent to assist our clients in filing debt relief orders, this has to be done by suitably qualified advisers who meet the Insolvency Service's stringent criteria. Debt Relief Orders have reduced the numbers of bankruptcies dramatically, they certainly have in our office. This takes the load off the court service as these orders do not need to be processed through the county court. Debt advice becomes complicated when it comes to the huge array of remedies which need to be explored; - it takes years of experience to be able to gain the trust of clients so that they can be satisfied they have been correctly advised as to the most appropriate remedy to bring their problem to a conclusion. Ultimately, this is what we look for so that our clients can take control of their lives once again and move forward;- having learned from their experience. You cannot learn debt advice at our specialist level in a training course lasting only a few days. You need to be kept aware of legislative change and to develop the competence levels needed to gain the trust of your client in order to work out the best way forward. In this day and age it requires a complex look at a whole range of solutions ranging from informal payment arrangements, administration orders, filing defences & part admissions, working out affordability with clients who are sometimes unrealistic over their personal finances, whilst remaining impartial and non-judgemental and to be aware of all the rules relating to proper negotiations within OFT guidelines. There are instances where applications need to be made to court and where you have to weigh up the solution in the light of the client's overall problem. It takes skill to remain calm when your client is often in a state of chaotic crisis; - it's not something you learn overnight.
We work right up to solutions involving applications in Court, insolvency and requests to waive debts or challenge them when they may not be legally recoverable. Our local knowledge is invaluable in securing successful negotiations with local councils over council tax and utility suppliers, we routinely deal with emergency situations and have to use our skill in bringing client and creditor to a point where an amicable solution can be found. Our aim is always to keep it out of court wherever we can. Much of our work goes a long towards paying back sums of money which in retrospect should perhaps never have been lent or borrowed, what you learn is that when clients borrow they genuinely think they can repay their debt, it is often the case that a client's life just changes through some kind of misfortune and suddenly they find themselves trapped in a spiral of escalating debt.
I suspect the Money Advice Service may have initially been looked upon as a way of commercial concerns profiting out of further money making opportunity be way of re-mortgages or consolidation re-finances. Our current economic market makes all this a no go area; - it could explain why it has not taken off in the way it was expected to. Government all too often reminds us that you cannot borrow your way out of debt and thus commercial lending has no place when it comes to a point where alternative finance solutions are completely unaffordable.
I do not think we are wrong to question how it is some providers seem to want to profit out of the misery caused by people ending up in debt. The client has often incurred high interest & default charges adding considerably to their debt, it just makes the amounts spiral out of control. It does not seem morally or economically right for any provider to look to make further profit out of the plight of those in debt; - this is work which should be entrusted to the non commercial not- for profit sector and funded at specialist help level where the client presents with a problems requiring specialist legal help.
The Lords are encouraged to vote for the amendment which increases the scope of the work we can do within the debt category. Government claims that its legal aid cuts are aimed at reducing litigation yet it restricts debt legal aid to situations where the client is facing court action. The wider cost savings to the public purse are to be found in voting for amendments which reduce the number of actions in court. The work of specialist debt advisers who have no commercial interest is to be encouraged as debt advice is the one area where you should never be allowed to profit from the misery inflicted upon those drowning in a sea of debt. It is wrong to assume that the work of those in the area of debt is generalist rather than specialist. In every agency there is a combination of both, the generalist advisers rely upon the expertise of the specialists currently funded by legal aid and thus it must remain.
We take a look at the (MAS) Money Advice Service v the work of organisations such the CAB who provide specialist debt advice under legal aid.
First let's have a look at some recent criticism levelled at MAS
"Criticism: MAS chief executive Toby Hobman received a pay package worth £350,000 for running an organisation that has hardly got off the ground"
Jeff Prestridge from the 'This is Money' financial website delivers his verdict on the Money Advice Service - 10th March 2012
"Perhaps the Money Advice Service will come good at some stage, but so far it has done little to convince me it is the right organisation to help consumers get to grips with their finances.
Four months ago, Financial Mail reported on the shambolic start MAS had made to life as a provider of free financial information to consumers. Just seven months after rising from the ashes of the Consumer Financial Education Body, MAS said it was axeing nearly half its staff as it sought to deliver more of its information and advice over the web rather than on the phone.
It was an extraordinary U-turn for an organisation entrusted with a budget of £44million a year – funded by consumers through a levy paid by banks, building societies and financial advisers.
Then last December the MAS’s reputation was dealt another blow when the Financial Services Authority, which oversees it, announced it was appointing John Spence to the MAS board.
As readers with long memories will know, he oversaw rampant mis-selling of high income equity-linked bonds at Lloyds in the late Nineties and early last decade. In 2003, after a £1.9million fine and bill for compensation of £100million, Spence was forced to admit he was ‘very sorry’ for the bank’s behaviour. These are hardly suitable credentials for a seat at the MAS board.
As I wrote at the time: ‘What MAS needs on its board are people who are passionate about delivering much-needed financial help to millions of households who are struggling like never before. Spence doesn’t fit that bill.’ He still doesn’t.
Last week, it was the turn of the Commons Business Select Committee to turn its gimlet eye on MAS when it published a report into debt management. Although the main conclusions were centred on the poor regulation of payday lenders and debt management companies, it didn’t spare MAS on any front.
The committee questioned its role, especially in the area of debt advice where Citizens Advice already does a splendid job. It also challenged MAS’s commitment to face-to-face advice, especially in light of the job cuts.
But the biggest criticism was reserved for the £350,000 package chief executive Toby Hobman receives for running an organisation that has hardly got off the ground. The committee said: ‘At a time of pay restraint, we do not believe that the head of a comparatively small organisation should receive a salary £100,000 in excess of the Prime Minister. We look to the Government to raise this with the FSA as a priority. The perception of such extravagance does not sit easily in an organisation tasked with helping those in debt.’
Hobman has made a pig’s ear of getting MAS off to a sound start. So let me give him a little advice: Mr Hobman, You could go a long way to turning round your organisation’s reputation by applying a voluntary hair cut to your grotesque pay. Your call."
Read more of Prestridge's damning indictment of the Money Advice Service here
www.thisismoney.co.uk/money/article-2113075/JEFF-PRESTRIDGE-A-helpful-hint-troubled-advice-service.html?ito=feeds-newsxml
The relevance of MAS to the current legal aid bill
Let's not forget that this news comes shortly before the House of Lord's votes on whether legal aid should remain within the scope of the scheme for those who need advice and assistance with a personal debt problem. The House of Lords are due to debate this on Monday the 13th March in the 3rd day of the report stage of the Legal Aid, Sentencing & Punishment of Offender's Bill.
Government has invested significant sums of money in to the Money Advice Service, but is it really an effective remedy and why chose it over and above the Citizens Advice Bureau & other agencies who seem to be doing 'a splendid job' according to a Commons Business Select Committee?
The Department of Business, Skills and Innovations regard Citizens Advice as 'value for money'
Why don't we just keep legal aid funding for the CAB to provide specialist debt advice and other not for profit agencies too?
Indeed, the Department for Business Skills & Innovation (BIS) commissioned an independent value for money review of Citizens Advice and Citizens Advice Scotland in October 2010 which seems to give nothing but glowing praise for the work of Citizens Advice Bureau.
Amongst its findings it states:
"Overall English and Welsh bureaux saw 2.1m clients with 7.1m advice issues and a survey of a large sample showed that 95% were satisfied with the advice received. For Scotland,
the corresponding figures were 269k clients (2008/09) and 545k advice issues (2009/10) and a satisfaction rate of 93%, with the additional information that 98% of clients would recommend the bureaux to friends. About 40% of those surveyed in Scotland had used a bureau at some stage. The top issues for both organisations are debt/benefits which together make up over 55% of all issues. Next come employment and then housing."
"Face-to-face advice remains the keystone of the approach to dealing with clients, and the one that is considered essential in many cases, although it is increasingly replaced or supported by other channels, as described below. "
"Under the Financial Inclusion Fund 74k financially excluded clients received debt advice from bureaux in 2009/10 and 60% of them had achieved a positive outcome by the year end, mainly debts rescheduled and income gained"
"The nature of this activity by Citizens Advice and Citizens Advice Scotland does not appear to have changed since the last review, although the scale and complexity of the issues have
increased. Each organisation can point to changes in policy beneficial to members of the public which they had a hand, to a greater or lesser extent, in bringing about. Some examples are..
• Following pressure by Citizens Advice and Citizens Advice Scotland, DWP provided free phone lines for mobiles to all 70 of its main help desks
• Banks installed 419 non-charging cash machines in low income areas following a joint Citizens Advice/Citizens Advice Scotland campaign, giving easy access for around 1m bank customers
• Following extensive lobbying by Citizens Advice Scotland a new route into bankruptcy was provided in primary legislation. This benefited 8400 Scottish debtors in 2009
• Campaigns against the closure of DWP offices met with success in protecting public services
• HMRC announced changes to staff guidance on debt collection practices after an effective Citizens Advice/Citizens Advice Scotland lobby
• Citizens Advice/Citizens Advice Scotland pressure brought a government policy change to provide a more effective safety net for tenants if a landlord’s property was repossessed for mortgage arrears Citizens Advice and Citizens Advice Scotland are widely known to policy makers in government, in business and commerce, and to opinion formers, including MPs and the media. Most government departments considered that Citizens Advice, and where relevant Citizens Advice Scotland, had been influential in consultations on policy development, and identifying where policy needed to change."
"BIS core funding has achieved value for money."
The BIS report must surely be read as a clean and commendable bill of health for the work of the Citizens Advice Bureau. Report the report in full here
www.bis.gov.uk/assets/biscore/consumer-issues/docs/b/11-520-bis-independent-review-citizens-advice
The Money Advice Trust pull no punches over the importance of debt good quality advice
Here are a few of the quotes in their 2010/11 report
“Good advice is worth every penny we can possibly spend on it.”Baroness Wilcox, Under Secretary of State, House of Lords
3rd May 2011
"The problem we are tackling is stark. Problem debt affects
around 5 million people across the UK. Its consequences can be
as severe as eviction and even suicide; for many more people it
exacerbates poverty, mental health problems and vulnerability."
Joanna Elson OBE CDir
Chief Executive
Read the Money Advice Report here
www.moneyadvicetrust.org/images/Impact%20Report%20Final%20Draft.pdf
Potential problems with external delivery drivers
Few of can have escaped the blaze of adverse publicity concerning A4E and the welfare to work contracts they hold with government. These are currently under investigation by the DWP and Margaret Hodge who chairs the Public Accounts Committee is calling for all of A4E's contracts with government to be suspended until the outcome of the investigations are known.
A4E is a key 'delivery driver' in the Money Advice Service and some may therefore question whether it is right to consider the Money Advice Service as a viable alternative to legal aid funding (which currently is at risk of being severely cut back if amendments to the Legal Aid, Sentencing & Punishment of Offender's Bill are not passed by the House of Lords when they vote on this crucial issue on the 13th March 2012). Advice agency funding is in a state of limbo and the latest developments with A4E (who take up large chunks of advice sector funding) potentially throw further delays into the equation when it comes to finding alternative cabinet office solutions. It strengthens the case for continued legal aid funding because the alternatives are likely to become even more protracted and unresolved. You cannot vote legal aid out when there is no alternative on the table.
Here's a an extract from A4E's website and Mark Lovell's comments on their involvement with MAS (Lovell being one of the A4E staff hauled over the coals by the Public Account Committee in to Flexible New Deal contracts):
"You may have seen recent announcements in the media about the launch of the Money Advice Service. I am delighted that A4e was chosen as a key delivery partner and, since April, we have been delivering the new face to face aspect of this service. The launch yesterday introduced the online and phone services. Open to all, the service will give clear, unbiased advice on financial issues. Over 6,500 people have accessed the support so far and our advisers have been doing some wonderful work. Over 4,500 of the customers are classed as ‘financially vulnerable’ and they have been using the service to both better understand and improve their financial position.
It was nice to attend the launch of the national service in Westminster (yesterday evening), following the press launch on the BBC of the online service). I was able to share some of our case studies with the MPs and MAS staff at the event. Since the service is accessible to everyone, our advisers are helping a range of people – pensioners and students, people just made redundant, long term unemployed people, many in work and even whole families. They are helping people with queries on mortgages, insurance, savings and debt- and their work has recently help keep one customer out of jail with the support on offer.
The online service is here and will soon feature on the A4e website. It is designed for a very broad audience – whether you are working and looking to better manage finance or make an investment, or are in debt and struggling with money, it aims to provide information and signpost."
Read more about the MAS/A4E connection here www.mya4e.com/2011/06/09/money-advice-service/
Mylegal view
The Money Advice Service is regularly promoted on television in what I assume to be expensive advertising campaigns. What concerns me is the substance behind all the media hype. I have tried to use the Money Advice Service website to see how effective it really is and ironically it seems to refer you back to the CAB when you enquire about the need for what I would call 'real' advice. CAB holds the majority of legal aid debt contracts, others are held by Shelter and some other smaller agencies too; - they all work to a common aim under the not for profit sector. It seems wholly appropriate to continue to allow truly not for profit agencies to provide specialist debt advice under the legal aid scheme - you simply cannot profit out of people being in debt.
What we offer under the specialist help scheme funded by legal aid is exactly that; - it is specialist work. The Ministry of Justice consistently draws attention to how CAB only receives 15% of its overall funding (applied nationally) from legal aid. To me this makes complete sense as it illustrates that a certain volume of our work is specialist and needs the intervention of a skilled paid caseworker to sort out a client's debt problems, it often requires the need to identify other areas of advice where intervention may be appropriate, such as sorting out benefits or the client's housing problems. This is where many agencies collectively work together to provide the holistic range of services which CAB and other not for profits are renowned for.
We are the specialist division of CAB and I remain far from convinced that a service such as the Money Advice Service offers anything by way of a satisfactory alternative to the very good service we offer. We have advised people on debt and benefit problems for years, we know what we are doing and as the noble Baroness Wilcox points out 'good advice is worth every penny we can possibly spend on it. It is a false economy to say we have not got the pennies when we are likely to see pounds being foolishly spent on repairing the resultant damage.
We are for instance, skilled and competent to assist our clients in filing debt relief orders, this has to be done by suitably qualified advisers who meet the Insolvency Service's stringent criteria. Debt Relief Orders have reduced the numbers of bankruptcies dramatically, they certainly have in our office. This takes the load off the court service as these orders do not need to be processed through the county court. Debt advice becomes complicated when it comes to the huge array of remedies which need to be explored; - it takes years of experience to be able to gain the trust of clients so that they can be satisfied they have been correctly advised as to the most appropriate remedy to bring their problem to a conclusion. Ultimately, this is what we look for so that our clients can take control of their lives once again and move forward;- having learned from their experience. You cannot learn debt advice at our specialist level in a training course lasting only a few days. You need to be kept aware of legislative change and to develop the competence levels needed to gain the trust of your client in order to work out the best way forward. In this day and age it requires a complex look at a whole range of solutions ranging from informal payment arrangements, administration orders, filing defences & part admissions, working out affordability with clients who are sometimes unrealistic over their personal finances, whilst remaining impartial and non-judgemental and to be aware of all the rules relating to proper negotiations within OFT guidelines. There are instances where applications need to be made to court and where you have to weigh up the solution in the light of the client's overall problem. It takes skill to remain calm when your client is often in a state of chaotic crisis; - it's not something you learn overnight.
We work right up to solutions involving applications in Court, insolvency and requests to waive debts or challenge them when they may not be legally recoverable. Our local knowledge is invaluable in securing successful negotiations with local councils over council tax and utility suppliers, we routinely deal with emergency situations and have to use our skill in bringing client and creditor to a point where an amicable solution can be found. Our aim is always to keep it out of court wherever we can. Much of our work goes a long towards paying back sums of money which in retrospect should perhaps never have been lent or borrowed, what you learn is that when clients borrow they genuinely think they can repay their debt, it is often the case that a client's life just changes through some kind of misfortune and suddenly they find themselves trapped in a spiral of escalating debt.
I suspect the Money Advice Service may have initially been looked upon as a way of commercial concerns profiting out of further money making opportunity be way of re-mortgages or consolidation re-finances. Our current economic market makes all this a no go area; - it could explain why it has not taken off in the way it was expected to. Government all too often reminds us that you cannot borrow your way out of debt and thus commercial lending has no place when it comes to a point where alternative finance solutions are completely unaffordable.
I do not think we are wrong to question how it is some providers seem to want to profit out of the misery caused by people ending up in debt. The client has often incurred high interest & default charges adding considerably to their debt, it just makes the amounts spiral out of control. It does not seem morally or economically right for any provider to look to make further profit out of the plight of those in debt; - this is work which should be entrusted to the non commercial not- for profit sector and funded at specialist help level where the client presents with a problems requiring specialist legal help.
The Lords are encouraged to vote for the amendment which increases the scope of the work we can do within the debt category. Government claims that its legal aid cuts are aimed at reducing litigation yet it restricts debt legal aid to situations where the client is facing court action. The wider cost savings to the public purse are to be found in voting for amendments which reduce the number of actions in court. The work of specialist debt advisers who have no commercial interest is to be encouraged as debt advice is the one area where you should never be allowed to profit from the misery inflicted upon those drowning in a sea of debt. It is wrong to assume that the work of those in the area of debt is generalist rather than specialist. In every agency there is a combination of both, the generalist advisers rely upon the expertise of the specialists currently funded by legal aid and thus it must remain.