Update Note 14 February: Thankfully the government has now relented and put more money into the Financial Inclusion Fund, so the need for a campaign has now abated – full info in the debt help saved by government U-turn news story.
Over 100,000 people a year get help from the Financial Inclusion Fund (FIF), which provides money for non-profit debt counselling where there is none. Last week, however, the Treasury said the plug would be pulled from April. It’s a disgrace, the only problem is what to do about it?
Many of you have emailed me already with fury about this. The money is hugely important, especially to the wonderful Citizens Advice Bureau (CAB), where just over 2/3 of this cash goes (see debt funding pulled MSE News) and to pull it now just seems ridiculous to me. For speed here’s a cut and paste of my quote when the decision came last week…
"This is a flabbergasting decision to cut the funding. Never has the country needed to provide decent debt help more than now. It is disgusting the funding rug is being pulled from under the feet of agencies such as Citizens Advice. Debt crisis and bankruptcy don’t tend to hit until after an economic downturn, and that means right now we’d expect peak demand, and it won’t get better for a long time. I hope this is just short-sightedness and will soon be addressed. If not, it is a kick in the teeth to everyone struggling."
This is a massive issue
The numbers on this speak for themselves:
- Over 135,089 people were declared insolved in 2010, the highest since records began in the 1960′s.
- The average person in the UK who has debts, has £16,307 of unsecured debts (non-mortgage).
- Citizens Advice alone took 9,500 new debt clients EVERY DAY last year.
Now in the big scheme of government spending, £25m a year is not a lot. It’s less than a third of what the Highways Agency spent on consultants alone between 2004-10 and a tiny fraction of the additional £800m the government will raise from the bank lobby this year.
Yet this small cash makes a massive difference and I suspect helps the economy far more than it costs, as it prevents bad debt defaults (through DMPs, which means some is repaid, but slowly and fairly).
How do we fight the fund closure?
The squeezing of debt counselling funding isn’t something new, we knew it was coming. Many have lobbied politicians already, I did it myself in my speeches last year at both Tory and Labour conferences. Yet the problem seems to be no-one is co-ordinating efforts to stop this happening.
So last week I made a decision to see if we could use the reach of MSE to help. We were planning to lead this week’s email on it, the difficulty came with exactly what we do. Some of the ideas were:
- Start a petition: We have considered doing a petition, but the Number10 website doesn’t allow them anymore, so it’d have to be one of our own, a Facebook page, or a GoPetition. The truth is unless we have over 100,000 its not enough and I’m worried we won’t manage that and it’d actually be as damaging as a damp squib.
- Ask people to write to MPs: I’m slightly nervous of this as we did it for financial education a few weeks ago, but it was effective then. The problem with this is that it’s a Treasury budget decision, so I’m not sure we’d be targeting the right people.
- Start a social networking campaign: See if we can get this around Twitter and Facebook to get people aware of what’s happening and build a groundswell of public opinion.
- Ask people to donate: These are all charities (even the CAB) but not many realise that, so telling people that and asking if they can afford that they donate would be a practical way to raise funds.
- Do an MSE 50p campaign: On the back of the above, for those who can’t donate, in the past i.e. for the Haiti disaster, we’ve given money on top of the usual MSE charity fund, (which already includes debt counselling) by donating 50p for each genuine new recipient of the weekly email – we could do this for the CAB. This way those who can’t afford to donate can spread the message and feel they’re doing something (see other click and give models).
As none of these feel 100% like they’re what’s needed I’ve tried to put some feelers out there amongst friendly politicians to see if there are any big hitting members of the government who may be willing to take up the cause and focus on doing it with them.
So we’re holding out from doing anything for a week. While we wait to see what happens, we may well do some of the above, but I’d really appreciate any other thoughts or creative ideas (those with political lobbying experience are more than welcome).