Press Release - The Department for Business,
Innovation and Skills: Helping over-indebted
consumers
4 February 2010
The Department for Business, Innovation and
Skills’ (BIS’s) free face-to-face advice for people struggling with
debt has helped more people than planned, at slightly less than the
planned cost per person, and is highly regarded by those that use
it. However, demand is now outstripping capacity and support could
be provided to more people through further efficiencies, the
National Audit Office has reported. BIS also needs to engage
more effectively with other parts of government working to help the
over-indebted and with private sector advice providers.
UK consumers had £1,459 billion of outstanding
debt at November 2009 and personal borrowing represented 160 per
cent of household annual pre-tax income. While many people
successfully manage their debt, research in 2008 by the Bank of
England found that 11 per cent of people reported difficulty
keeping up with their bills and credit commitments.
Since it began in April 2006, BIS’s
face-to-face debt advice project has delivered help to some 270,000
people to the end of September 2009. An NAO survey found that 81
per cent of people who received the advice said it helped, compared
to 69 per cent for advice received from a fee charging professional
and 59 per cent for advice received from a bank.
In the recession, demand for support and
advice has become greater than capacity. Between July 2008 and July
2009 there was a 28 per cent increase in the number of people
contacting advice providers and, in some instances, there is not
the capacity to cope. A quarter of advice agencies are either
refusing new clients or have a waiting period of over a month.
BIS’s debt advice project is part of a
government-wide strategy to support those struggling with debt. The
strategy is complex with over 50 different projects, a number of
funding streams, and diffuse responsibilities. Risks to value for
money created by this complex delivery structure are not being
controlled effectively by the current programme management
arrangements. If the strategy is to succeed, there needs to be
better governance, performance management and evaluation.
The NAO has also called for the Department to
do more to evaluate how advice can be provided more efficiently,
and to assess the role that all debt advice providers, including
the private sector, could have in meeting Government’s aims for
debt advice provision.
Mr Amyas Morse, head of the National Audit
Office, said today:
“Many people are able to
manage their debt, but for some the problems may seem
insurmountable. When that is the case, people need good advice
which they can trust and which is accessible. BIS’s project to
offer face-to-face advice has done well and has helped those who
have used it. But demand is outstripping capacity and the
Department needs to look at ways of reaching even more people; and
it must establish a coherent framework for delivering the
Government’s wider strategy for tackling
over-indebtedness.”
Notes for Editors
-
Press notices and reports are available from
the date of publication on the NAO website, which is at
http://www.nao.org.uk/. Hard copies can be obtained from The
Stationery Office on 0845 702 3474.
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The Comptroller and Auditor General, Amyas
Morse, is the head of the National Audit Office which employs some
900 staff. He and the NAO are totally independent of
Government. He certifies the accounts of all Government
departments and a wide range of other public sector bodies; and he
has statutory authority to report to Parliament on the economy,
efficiency and effectiveness with which departments and other
bodies have used their resources.
Press Notice 07/10
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