Conclusions and recommendations
1. The face-to-face debt advice project has
gone well but management of the over-indebtedness strategy that
it supports has been seriously deficient. Our
recommendations are aimed at obtaining even greater value for
money from the debt advice project and addressing the weaknesses
in managing the strategy.
2. The arrangements established to co-ordinate
the 51 different interventions making up the strategy have not
worked, and it is unacceptable that no one is in charge. The
groups responsible for oversight and co-ordination met rarely,
if at all, and no single person or department has taken overall
responsibility. The Department should work with Treasury and the
other key departments to establish proper oversight of the strategy,
starting with allocation of responsibility for the strategy to
a senior responsible owner.
3. The over-indebtedness strategy has been
in place for six years but its success has never been evaluated,
there has been no annual report since 2007, and the Department
does not even know which are the most and least cost effective
of its own interventions. The Department
should work with Treasury and the other key departments to assess
the relative effectiveness of the interventions making up the
strategy. It should then use this assessment to review whether
the interventions currently making up the strategy still present
a coherent programme of action and where best to devote resources
in the future.
4. The Department does not know why the cost
of providing face to face advice ranges between its providers
from £201 to £377 per person. More
people could be reached if the Department better understood the
cost base and efficiencies of the advice providers. However, the
Department does not analyse cost variations in detail and does
not know how much variation is due to efficiencies that could
be applied more widely. The Department should examine why variation
occurs, and promote shared learning between providers on efficient
ways of working.
5. The Treasury does not permit the funds
it provides for face-to-face advice to be used for other, cheaper,
forms of advice, even though they are preferred by some users.
Face-to-face advice costs an average of £265 per consumer,
once start up costs are stripped out, while telephone advice costs
£51 and internet advice is cheaper still. Directing consumers
who could be supported by telephone or internet to those forms
of advice would therefore allow more users to be helped, and highlights
the importance of assessing the relative effectiveness of the
interventions making up the strategy. The Treasury should allow
the Department greater flexibility in the use of funds, and evaluate
urgently the potential for other forms of advice to deliver help
to more consumers than it can currently reach.
6. The growing demand for debt advice is outstripping
the Department's capacity to provide it.
As well as the Department's project, debt advice is available
from a variety of bodies in the public, private, and third sectors,
but the Department lacks a clear picture of the quality of this
advice, or the potential for such bodies to help meet future demand.
The Department should evaluate the likely level of future need
for advice, and the ability of all providers in the field to contribute
to providing advice of the quality and quantity required.
7. It is not clear that the Department's debt
advice services are targeting those most in need.
For example, younger people are particularly at risk of becoming
unable to manage their debts, but seem no more likely than other
groups to receive advice. The Department should compare in more
detail the profile of those accessing its debt advice services
with that of the wider population of over-indebted people in order
to target its services more effectively.
8. The Department's programme to tackle illegal
lending by loan sharks has resulted in 150 successful prosecutions,
and is projected to cost £16.5 million.
The Department has yet to evaluate the value for money of this
programme. It should do so urgently and report back to the Committee
on the outcome.
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