Low income and debt problems inquiry

It is more difficult to access information regarding services that can provide support with debt. A lot of this information is now online – websites and social media.

A person must have an email address to be able to apply for Universal Credit. Those customers who have no or limited access to digital technology are at a disadvantage. This can mean it takes longer for them to get any entitlement due having to rely on others to assist, updating any household information is not timeous, they have no or limited access to current information and advice and therefore they can be less likely to engage with services. In some organisations, failure to contact within x time means that can be removed from the system and any debt issues are more likely to spiral out of control.

If you are digitally excluded it can cost more money, as limited access to services and a number of deals with service providers are online – for example, cheaper deals if you pay by direct debit or sign up to online billing instead of paper billing.
Difficult to get through to creditors by phone and a number now offer web-chat which is no good if don’t have equipment or skills to access this.
Some money advice services also now operate web-chat as a preferred delivery channel.
Creditors often require online financial statements to be completed and/or signed electronically.
There are reduced face-to-face services available due to reductions in funding and the pandemic.

The Council has Digital Inclusion Officers who can assist those having problems. In Housing Services, Housing Officers and Income Maximisation Officers carry out home visits and can access digital information on behalf of the customer – this helps to alleviate digital exclusion. Housing Services were successful in obtaining digital hardware e.g., tablets, laptops etc for some of our Homeless clients and tenants in our Sheltered Housing Complex. This has allowed vulnerable groups to use hardware that they otherwise could not have afforded thus making sure that they are not excluded from applying for benefits, work, able to do online shopping, meet virtually with family members and so on.

We are aware that there are community groups which have been set up to provide education and assistance with technology and library staff can also assist locally.

Stirling Digital Inclusion Project – offers free and tailored help to complete beginners, or those looking to improve their digital skills. The aim is to improve confidence in using a wide variety of services online.
Increased delivery channels – for example, NHS Near Me. No software needs to be downloaded and the digital platform can be accessed by just clicking on a link.
Connecting Scotland – The availability of ipads, chromebooks and mifis to people who are digitally excluded, along with digital support to reduce digital exclusion.
Reboot Stirling – a charity refurbishing equipment and devices such as smartphones, ipads, chromebooks and laptops for reuse

• Stigma – there is still stigma in accessing advice services for debt and people don’t want to be seen accessing these services. Many customers don’t want to face up to their current situation unaware of what help is available to them.
• Referrals from other agencies – a number of support agencies who would normally have referred clients for advice, weren’t operating during the pandemic leading to reduced referral numbers for vulnerable clients.
• Accessing good quality information about sources of advice – a number of support services/drop-in services who would usually refer people for advice, have been closed or operating remotely during the pandemic.
• The existence of local services – The majority of local advice services/community based advice services have been either closed or only providing telephone advice during the pandemic. Although community based services are starting to open up again, there is still limited face-to-face advice provision.

Some services only provide online services – barrier if no access to equipment, broadband and/or digital skills. Customers often tell us that the cost of Broadband is too expensive when on low incomes and therefore their digital experience is somewhat reduced trying to access money advice.

Advisers based in GP surgeries, schools etc. were unable to continue to provide face-to-face advice during covid, leading to services being less accessible.

If there is less availability of services in communities, people on low incomes are unlikely to be able to afford to travel from rural communities into city centres to access advice services. There are a number of people who prefer to speak to an Officer face to face and travel costs to the city centre to access some services is a barrier.

In addition, those customers with young children find it difficult to have personal and sometimes distressing conversations whilst taking young children to meetings with them and have mentioned that childcare provision when in these situations would be helpful.

Services are already stretched with increasing referral numbers and more complex casework; but the predicted increase in numbers of debt cases will make it very difficult to meet demand going forwards. Adviser wellbeing is also of concern with the increase of caseloads combined with more complex casework.
There is a reduction in funding available, particularly to Local Authorities, which makes it difficult to develop and expand services to meet the increasing demand.

It is underestimated just how much debt can impact a person’s mental health. Customers have told us that they are unable to sleep, stress has been placed on relationships – sometimes causing domestic abuse. They are embarrassed to ask for help, the stress has meant they are unable to think clearly and therefore cannot manage or prioritise debt, existing mental illness has been exacerbated and they feel isolated and alone.

We have noticed an increase in clients with mental health issues during the pandemic. The pandemic has also exacerbated existing mental health issues.

There was temporary relief from creditors during the pandemic due to holds being placed on accounts. However, this is only temporary and will be lifted.

Poor mental health can stop people engaging with other services who would also refer for debt advice. People don’t answer their phones, open mail/emails and very often avoid dealing with creditors and dealing with their debts. People are also often too scared to leave house and engage with GP services etc. which can exacerbate their mental health and ability to deal with debt issues. It can be very difficult to maintain contact with clients with mental health issues, making it difficult to support them.

There is national research available, but we are unaware of any local research.
In our experience, creditors are accepting debt and mental health forms more readily and writing off debt.
We have also recorded an increase in debt clients with mental health issues in recent years.

We work with other local services to promote prevention and encourage referrals at an early stage, to enable clients to be supported before their mental health is exacerbated due to debt.

Our Income Maximisation and Budgeting Advisers also link in with local mental health services, to provide advice and support at an early stage.

We carry out a number of outreach sessions in communities, to make our service as accessible as possible – for example, outreach work in GP surgeries, hospitals and schools.
One of our projects – Thrive to Maximise– is a free Employability Project targeting parents residing in the Stirling Council area. The aim of the project is to progress families and help them lift them out of poverty. The programme supports parents:
• Who are out of work and seeking support to gain employment; or
• Who are in work but needing support to gain an improved labour situation.

This comprehensive project, a partnership between Stirling Council’s Learning and Employability Service and Advice Services, offers dedicated and specialised support with a range of issues that many parents experience as they think of returning to work, including:
• Money, benefits and debt advice;
• Confidence building, motivation and well-being support;
• Family well-being and support with barriers around the children;
• Help with gaining training and qualifications to become more work ready;
• Help to apply for College or University;
• Help with finding a new job; or
• Help with gaining an improved labour situation.

All participants on the programme are allocated a key worker who will provide tailored support to their individual needs.

Some customers have told us that they have entered into arrangements with some companies dealing with Protected Trust Deeds etc without seeking professional money advice first of all. This has resulted in, for some, being put into arrangements which are unachievable and a lack of flexibility in payments when household circumstances change.

Over the last few years, we have seen a decline in clients with any disposable income. Therefore, formal debt options such as DAS and protected Trust Deeds are not an option. This issue will only increase with the cost of living rise, increasing fuel costs etc.
We welcome the changes under the Coronavirus Scotland Act 2020, as these made bankruptcy more accessible to clients who would not have previously afforded the fee, or their debt amount would have been too high to access a MAP (Minimal Asset Process).

The length of time before a customer is discharged is shorter now than it was some years back so this can only be a good thing for the customer.

As in question 8, the reforms have gone some way to help people on low incomes, for example, increasing access to a MAP (Minimal Asset Process) and reducing the bankruptcy fee. However, these laws could go further.
There is also more protection for clients, as it is more difficult for a creditor to petition for bankruptcy - debt level has increased from £3,000 to £10,000.

There needs to be a complete overhaul of the legislation governing debt options, as a number of these are no longer suitable. In the interim, the temporary measures could be made permanent.

Rent arrears; council tax arrears; utility arrears; credit cards; social fund loans and unsecured loans

Current processes for social housing providers mean that since the introduction of Pre Action Requirements in 2012, Officers have to demonstrate that early intervention and support and been provided. This can be done in-house or by referring to other professionals such as Citizens Advice Bureau, Shelter and so on. The introduction of the First Tier Tribunal for private sector tenants in arrears has been welcome and allows those tenants more equitable treatment than they perhaps had before.

Processes vary greatly from local authority to local authority, as well as between other social and private landlords; as individual policies and procedures are in place. A number of local authorities and housing associations also have in-house Income Maximisation and/or Money Advice Teams to advise and support tenants.

Pre-action requirements need to be tightened up to require a formal referral for money advice and not just the requirement to make tenants aware of money advice services (e.g. listing these on the bottom of arrears letters).
Practices need to focus more on prevention/early intervention and referrals to independent advice services at the earliest possible stage. Provision of accessible, independent ‘holistic money, debt and benefit advice’ services need to be provided and promoted by local authorities and partners.