2016/17 Business Plan

Transcription

1 2016/17 Business Plan CAP s official response to the Money Advice Service s consultation February 2016 Lifting people out of debt and poverty

2 Christians Against Poverty (CAP) broadly welcomes the Money Advice Service (MAS) s priorities and activities as set out in the 2016/17 Business Plan. We wish to commend and support MAS in their role of promoting a new and collaborative approach with the ambition to bring about real change. Helping people manage their money well is at the heart of what we do at CAP. Through our network of 290 CAP Debt Centres, CAP improved the financial wellbeing of over 12,000 people and helped 2,534 become debt free in In addition to this, CAP is the largest provider of free face-to-face adult financial education in the UK, with 849 CAP Money Churches providing a three-week money management course, equipping around 12,000 people each year to budget, save and spend wisely. Our commitment remains to help the poorest and most vulnerable in our society and therefore the majority of our client base falls into the struggling segment. In recent years CAP has responded to the wider challenges to this group s financial capacity, offering three new services to support clients seeking employment, struggling with life-controlling habits and to contend with the wider influences of money management. To this end CAP runs 145 CAP Job Clubs, 44 CAP Release Groups and has begun piloting CAP Life Skills. 1 The Business Plan sets out strategic aims that capture many of the key aspects of financial capability, boasting a breadth of priorities and proposed activities. We appreciate the opportunity to comment on the Business Plan and hope that the insights gained from our 19 years experience helping those struggling with unmanageable debt, and in particular as a provider of financial education since 2008, will add valuable support and aid in the development of the most comprehensive strategy possible. Although CAP is independently funded, we are keen to engage with MAS and work alongside the rest of the debt advice sector. In particular, we would like more engagement with MAS about the CAP Money Course. In addition, as a major player in the debt advice industry, CAP would like the opportunity to join the Debt Advice Steering Group. CAP would like to take this opportunity to thank MAS for their commitment to support the debt advice sector in providing consistent and high quality debt advice. We look forward to seeing the outcomes from this Business Plan materialise, and will continue to empower local communities to offer holistic support to those in financial difficulty and expand our range of services to tackle the causes of poverty. Thank you for your continued commitment to improving financial wellbeing across the UK. Matt Barlow UK Chief Executive 1 See appendix for more information about the CAP Money Course, CAP Job Clubs, CAP Release Groups and CAP Life Skills. 2 CAP (2015) Client Report 2014, accessible at capuk.org/clientreport 2

3 The three-year Corporate Strategy for the Money Advice Service 1. Do you have any comments on the types of customers we propose to target our efforts towards, as set out in our three-year Corporate Strategy? It is welcome that helping those with financial difficulties is a high priority area across all segments. It is important to recognise that financial wellbeing and capability are fluid. In CAP s experience, even someone who would be considered cushioned can become over indebted and find themselves struggling day to day due to the impact of a significant life event, for example a long term illness or bereavement. CAP also acknowledges the importance of the other high priority areas, both of which are also key target groups for CAP s services. Predominantly, CAP s Debt Help clients fall into the struggling segment, with an average yearly household income of 13,897 and 41% living solely on benefit income. 2 By contrast, the CAP Money Course predominantly equips those that are squeezed to manage their money better day-to-day and empower them to plan ahead. However, those in the struggling segment remain the prime focus of CAP s work, as experience shows that many of this group face significant hardship, and wider circumstances mean that they will remain in this segment for a substantial period, if not indefinitely. In light of this, CAP believes that it should also be of high priority to support this segment in planning ahead. As money will always be tight for this group, it is essential that they are supported to take back control of their finances and are empowered to plan ahead as best they can. Currently, CAP does this by encouraging clients to save while working to resolve their financial difficulty and by providing financial education. Research shows that this is successful, with 96% of CAP s clients remaining debt free, 83% feeling in control of their finances and 48% having savings. 3 In addition, more time and intensive support is often needed to help those in the struggling segment engage with financial education and the wider factors that impact their financial capability and wellbeing. In recognition that the CAP Money Course was not successfully reaching this segment, CAP has begun piloting a new service called CAP Life Skills. CAP Life Skills provides holistic financial education through an eight-week course exploring the influences and implications of how money is managed, coupled with a supportive community group and one-to-one support to help individuals put into practice the skills they learn. 2. Do our six aims cover the right areas for the three-year Corporate Strategy period, and do they set the right level of ambition for the Money Advice Service? The six aims set out in the Corporate Strategy are fitting in terms of scope and ambition. They are all areas that CAP perceives to be vitally important and are already engaged with in some way. For instance, CAP provides a debt-counselling service to the poorest and most vulnerable struggling with financial difficulty, and financial education to promote budgeting and the value of saving through the CAP Money Course and as part of CAP s debt counselling process. In addition, CAP has seen great value come from the partnerships built over the last several years with the credit industry and wider support services. This experience has 2 CAP (2015) Client Report 2014, accessible at capuk.org/clientreport 3 CAP (2012) After CAP s service: staying debt free 3

4 demonstrated how interlinked these areas are and the value in investing in them, and therefore CAP is pleased that MAS perceives them as key aims. In particular, CAP applauds that MAS are aiming to encourage earlier access to debt advice. Two thirds of CAP clients wait over a year before seeking debt help, with half of this group waiting over three years. 4 The top reasons for waiting are fear, shame and not knowing anyone could help. Encouraging people to access debt advice earlier is a significant challenge and an area where MAS s focus would be extremely valuable. In addition to these aims, other areas that CAP would recommend MAS to focus on are the wider root causes of debt, such as joblessness and addictions, and investigating key life events or stages that mean people move into high risk segments. These areas are pertinent based on CAP s experience of working for those in financial difficulty and have led to the development of CAP Job Clubs and CAP Release Groups. Aims 1-6: our programme of work for 2016/17 3. Given the intent and scope of our aims, what are your comments on the activities and priorities we have set out in each chapter covering our programme of work against each aim for April 2016-March 2017? 1. Succeeding through partnerships MAS has a valuable role to play in helping foster partnership working across the sector to aid effective delivery and shared learning. Previously CAP has had little engagement with MAS about financial education and has felt that the contribution CAP makes to the sector through the CAP Money Course has not been recognised despite being the largest provider of free face-to-face adult financial education in the UK. Therefore, CAP welcomes that establishing connections with organisations making the biggest contributions has been set as a priority. Year one of the Strategy also has a significant focus on evaluation, which will be valuable to monitor changes in the level of financial capability in the longer-term and facilitate learning amongst the sector. 2. Earlier and wider access to debt advice Action in this area is very much needed and CAP strongly supports MAS s priority to increase earlier engagement. As previously mentioned, CAP s research shows that the majority of clients wait several years before seeking debt advice. Intervention from MAS to increase knowledge about available support and to reduce the fear and shame associated with seeking advice is extremely welcome. In addition, when looking to make more high-quality debt advice available, CAP wishes to impress the importance that support extends beyond initial advice and throughout the whole journey to become debt free for those that need it. This is particularly applicable for those in the struggling segment. Furthermore, improving the financial resilience of clients is also an important and worthwhile area for action and CAP s experience corroborates that this needs to be locked in at specific stages of clients debt advice journey. Particularly for the struggling segment, debt advice needs to support them and provide financial education throughout their journey as they encounter various challenges. This financial education 4 63% waited over a year and 29% waited over three years before seeking help. 42% waited because of shame, 40% because they didn t think anyone could help and 27% because of fear. CAP (2015) Client Report 2014, accessible at capuk.org/clientreport 4

5 needs to be delivered in a piecemeal fashion as clients capability to deal with their finances returns, for instance in the initial stages of advice helping clients to manage their budget and then subsequently empowering them to manage extra disposable income as it becomes available and to consider saving for the future. 3. More people budgeting and saving CAP endorses the priorities and actions set out to encourage more people to budget and save. Both of these are important focuses and it is encouraging that Universal Credit claimants have been included in this remit. While many of the activities in this area may be targeted more towards the squeezed and comfortable segments, CAP s experience shows that it is possible to help those who are struggling to save and budget effectively even though they often perceive this to be unmanageable themselves. Saving also brings significant benefits during debt management plans and CAP strongly supports the inclusion of a savings category in the Standard Financial Statement. This is evidenced by the high proportion of CAP clients that remain debt free after working with CAP Improving access to guidance and advice Working with some of the poorest and most vulnerable people in the UK, CAP is aware of the vital need to fill the advice gap affecting consumers in financial difficulty. There is a lack of affordable, independent face-to-face financial advice available to those who are considering whether to release assets to repay their debts. In particular, this involves releasing lump sums from pension pots, re-mortgaging properties to release equity or switching mortgages. Therefore, expanding on the Financial Advice Market Review and related mapping exercises with a view to take action to fill this gap is extremely welcome. CAP does not consider that the proposal to create a gateway service would be effective or desirable as a single access point into advice. There may be benefit in providing a general source of information to help those who are unsure where to access advice appropriate to their needs. However, it is important to note that CAP s largest referral source is word of mouth, which accounts for a third of total referrals. 6 In many cases, these personal recommendations of CAP s service are important to help clients build the courage to make the call for debt advice. In addition, a further quarter come directly from other support services that have already determined CAP to be the most appropriate debt advice source to refer the client to. 7 In these cases it would not be appropriate to divert clients through an extra process before they can access advice. 5. Working within financial services CAP strongly advocates relationships as the way forward to promote decision-making that brings the right outcomes for consumers. It would be valuable for MAS to use their influence to facilitate regulatory change and promote innovation to complement on a bigger scale the engagement of smaller players such as CAP. In addition to the plans set out, working closely with priority creditors to improve outcomes for consumers and maximise uptake of the Standard Financial Statement would be extremely valuable, especially to the struggling segment. 5 CAP (2012) After CAP s service: staying debt free 6 37% of CAP s referrals in 2014 came from word of mouth or recommendation from an existing client. CAP (2015) Client Report 2014, accessible at capuk.org/clientreport 7 27% of CAP s referrals in 2014 came from churches, social services, CAP Money Courses, Doctors, CAB or another charity. CAP (2015) Client Report 2014, accessible at capuk.org/clientreport 5

6 6. Widening and improving financial education The proposed actions to widen and improve financial education are all commendable. Through providing the CAP Money Course and CAP Debt Help, CAP is aware of the substantial benefits to wellbeing financial education brings. While CAP wholeheartedly supports financial education in schools and offers this through CAP Money Kids and Youth, more explicit action to promote financial education amongst adults would also be welcome, particularly for high risk groups such as ex-offenders. CAP Money has been run in 12 prisons, receiving positive feedback from attendees and staff. Furthermore, it needs to be recognised that parents play a vital role in shaping the financial capability of their children and setting an example of money management in the home. Financial education is needed at all stages of life and understanding the long-term impacts will help tailor offerings to the needs of different groups and life stages. Measuring our impact 4. Do you agree that the performance indicators we have identified effectively capture the intended impact of the Service s work? CAP has no objections to the proposed performance indicators. 5. Are there any other ways we could measure our effectiveness? It is clear that MAS places emphasis on evaluation, which is commendable. There are no other ways to measure effectiveness CAP wishes to particularly suggest and the Strategy s plans to create robust measures for financial capability is welcome. Our service in the devolved countries 6. Do our plans understand and reflect the distinctive financial capability needs in the devolved countries of the United Kingdom? CAP applauds MAS for considering the diverse needs of the devolved nations in the Corporate Strategy, and supports the proposed plans. Further, CAP would encourage continued consideration of where lessons learned in the devolved nations would bring benefit to the UK as a whole. Questions about the plan overall 7. Do you think the Business Plan sets the right direction for the Service over the period and specifically ? The Business Plan sets a clear and appropriate direction for MAS over the next three years. As a whole, the aims set the right scope for MAS in improving financial capability and wellbeing in the UK and the proposed work for is a positive and significant first step towards these. 6

7 8. Is there anything missing from the Business Plan? Are there any specific solutions, partners or techniques that you would expect us to make use of in relation to the financial capability challenges we aim to tackle? The Business Plan has a wide scope and covers many important areas, but based on CAP s experience there are a few key elements that are missing. Firstly, digital inclusion is vitally important, in terms of both digital skills and means to access the Internet. A substantial proportion of CAP s clients are not digitally included and this limits their ability to access the best deals and other advice. Secondly, there is no mention of initiatives to promote financial capability amongst particularly high-risk groups, such as inmates and ex-offenders, or those to tackle the wider causes of debt and poverty, such as unemployment, addiction and low wages. Furthermore, the strategy would also be more comprehensive if it addressed the need for more holistic financial education that addresses the wider causes of poor financial capability and meets the needs of more vulnerable groups, such as those with learning disabilities and poor literacy. This is a need that CAP is trying to address through CAP Life Skills, but more needs to be done to offer this more extensively. In addition, as the largest provider of free face-to-face adult financial education in the UK, CAP is disappointed about the lack of interaction with MAS. CAP would welcome engagement from MAS and is keen to be seen as a key partner. 9. What are the key risks and issues you would expect us to address as we deliver the plans? The key risk that MAS need to address when delivering the plans is that the most vulnerable will not engage. While all on low incomes and in financial difficulty can be deemed to be vulnerable to some extent, other characteristics and circumstances can interplay with this to make some people particularly vulnerable. For instance, those with mental health issues and learning disabilities commonly find it difficult to engage with advice, especially in a sustained way. Extra support needs to be provided to these groups to ensure they also benefit from the Business Plan and that harder to reach groups, such as those that are socially excluded, are also engaged. 10. Is the plan clear and easy to understand? If not, please indicate sections that you think should be made clearer. Yes. 7

8 Appendix The CAP Money Course The CAP Money Course is a free, short money management course that typically runs over three sessions in consecutive weeks. The course teaches people to budget effectively, consider how to maximise their income, and to spend and save wisely. It also emphasises the benefits of using cash and explores a simple money management system involving regular payments, cash and savings accounts. It is also accompanied by an online budgeting tool that delegates have ongoing access to, so it is easy for them to amend their budget as their circumstances change. CAP has provided free face-to-face adult financial education since 2008 and is now the largest provider in the UK. Courses are run by volunteers from local churches, who are trained to run the CAP Money Course in their local community. There are currently 849 churches actively partnering with CAP to provide the CAP Money Course and in 2014, 11,850 delegates attended a course. CAP also offers course materials for children, youth and student age groups. CAP Life Skills CAP Life Skills is CAP s newest service and aims to empower people to take positive action to deal effectively with the demands, challenges and realities of everyday life. It has been developed in recognition that for some people financial education needs to be set within a wider context to provide the skills necessary for full participation in everyday life. CAP Life Skills offers more intensive support than the CAP Money Course, looking at the influences and impacts of how people manage their money, such as organisation, relationships, health and wellbeing. The course is run over eight-weeks and also incorporates one-to-one coaching time to help delegates create a personal budget and community time to share tips, prevent isolation and to offer support. There are currently 12 initial pilot groups running CAP Life Skills. CAP Job Clubs Offering practical and emotional support for jobseekers, CAP Job Clubs are run in a local church on a weekly basis. The clubs are an opportunity for members to share experiences, network and mutually support each other, whilst undertaking an eight-week employability and job search training course, which can be repeated as many times as they wish. In addition, members also receive on going one-to-one coaching and progress reviews with their Job Club Coach each month. This is to help tailor what they have learnt on the course to their situation and to support them as individuals. CAP Job Clubs also work locally to build links with local businesses to arrange work experience and mentoring opportunities where possible. CAP currently runs 145 Job Clubs across the UK. On average members have been unemployed for 24 months and just under a quarter of members have found employment with 84% remaining in work after three months. CAP Release Groups Currently in pilot stages, CAP Release Groups aim to tackle the wider causes of poverty and debt by providing support to those with life-controlling habits and will be officially launched in Inspired by the principles of the Twelve Steps, CAP Release Groups have three elements that work in parallel: an eight-week course that helps members tackle the roots of their dependency issues, weekly community time and monthly one-to-one coaching sessions. Members set their own goals and are encouraged to commit to making the choices required to achieve the change they want to see. They are supported through this journey 8

9 emotionally and also encouraged to consider the practical steps they can take to make their journey easier. There are currently 44 CAP Release Groups open across the UK supporting members with a range of dependencies, including smoking, gambling and shopping. 9

10 Requests for further information This response has been written by Rachel Gregory, External Relations Analyst for Christians Against Poverty (CAP), with contributions from: Dawn Stobart, Director of Debt Management and External Relations David Maxfield, Head of Policy and Compliance Chabu Chipampe, Creditor Liaison Manager Mark Anchen, Creditor Liaison Manager Paul Walmsley, Creditor Liaison Manager Daniel Kelly, Creditor Relations Analyst To discuss any queries and to request further information, please contact: Rachel Gregory External Relations Analyst

11 capuk.org Disclaimer: This information is not intended to be legal advice and is for educational purposes only. Although care is taken to ensure that this information is accurate and correct at the time of writing, Christians Against Poverty cannot accept any responsibility for mistakes or omissions. Christians Against Poverty excludes to the extent lawfully permitted all liability for loss or damage arising from reliance upon this information. Copyright 2016 Christians Against Poverty. All rights reserved. This material may not be reproduced for any purpose without first obtaining written permission from Christians Against Poverty. Lifting people out of debt and poverty Registered Office: Jubilee Mill, North Street, Bradford, BD1 4EW e info@capuk.org. t Registered Charity No: (England and Wales), SC (Scotland). Company Limited by Guarantee, Registered in England and Wales No: CAP is authorised and regulated by the Financial Conduct Authority. Registration Number: