+ 6D IN BVRG H + THE CITY OF EDINBURGH COUNCIL Item no 5 Report no Review of Debt Advice Services Social Justice & Older People Scrutiny Panel 7 February 2006 1 Purpose of report 1.I Scorecard report on the review of the provision of Debt Advice services as requested by Social Justice & Older People Scrutiny Panel of 1 November 2005. 2 Council consideration 2.1 Previous reports considered by the Executive during 2005: 0 Review of Debt Advice Partnership Service Provision, Etc. (Item 20, Report to Executive of the Council, dated 1 February 2005.) Update on Young People's Debt Advice Project, Etc. (Item 61, Report to Executive of the Council, dated 15 March 2005.) 0 Use of Additional Scottish Executive Funding to Enhance Debt Advice Service Provision across Edinburgh. (Item 44, Report to Executive of the Council, dated 15 March 2005.) Update on Debt Advice Partnership Service Provision - Court Legal Representation and Progress on Other Debt Advice Initiatives. (Report to Executive of the Council, dated 8 November 2005.) 3 Background information 3.1 The service demands on the Debt Advice Partnership continue to grow. This is evidenced at paragraphs 2.2, 2.3 and 2.4 below. Another trend that is evidenced is that the cases being addressed are becoming more complex, with people carrying a greater range of debts and amount of debts than was the case previously. 3.2 During 2003/04 the Debt Advice Partnership dealt with over f 18.6 million of debt involving 1,300 New Cases averaging approximately f 14,300 per client. 3.3 During 2004/05 the Debt Advice Partnership dealt with over f24.4 million of debt involving 1,671 New Cases averaging approximately f 14,610 per client. 1
3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.1 1 In the first 5 months of 2005/06, the Debt Advice Partnership is dealing with over f 14 million of debt involving 793 new cases averaging approximately f 17,730 per client. If these figures are projected for the year, we anticipate dealing with some 1990 cases, a 14% increase, and f33.6 million of debt across the city, a predicted increase in overall debt of some 38% from the previous year. The Court Legal Representation is also proving a success. As previously reported to the Executive on 1 February 2005 (Review of Debt Advice Partnership Service Provision - Court Legal Representation Update and Progress on Other Debt Advice Initiatives), this arrangement has been in place since May 2004. This service was initially introduced, as it had been identified that there existed a legal poverty trap where clients who require civil advice and assistance and legal aid are excluded from the services of a solicitor, the reason being their level of income and the levels set by the Legal Aid Board. There are services available to assist certain client groups, namely, the In Court advice service provided by Citizens Advice, legal practices who provide legal aid but expect payment and SHELTER for specific housing issues. There are restrictions to the scope and extent of service they are able to provide. During its first year, a total of 63 clients of the Debt Advice Partnership applied for legal representation using this service. If the service was not in place, then it is likely that a large number of clients would not have received either free legal advice or legal aid. Earlier figures suggest that almost 27% of clients would have needed to pay their own legal costs if this service was not available. The service costs approximately f35,000 per annum to operate but is funded by the Scottish Executive. The Young People's Debt Advice Project funded by the Scottish Executive and reported to the Executive of 15 March 2005 also continues to thrive, although the emphasis on work has come through referrals from Youth Groups rather than direct texting in to the Big Number by young clients. As indicated in the earlier report, the methodology was that preferred by the Scottish Executive to assess the merit of a texting service rather than the more conventional telephone or drop-in services. There have been 15 New cases so far this year as against a total of 22 for last year. The majority of the self-texting clients occurred when the Big Number was visible on a daily basis when advertised on local buses. A further intensive publicity campaign is planned for next month and will run for approximately three months. The Young Persons Dedicated Adviser maintains contact and gives regular talks to and with Canongate Youth Project, Underground and 6 VT. These organisations also refer clients. Further training sessions to volunteer youth workers with Move On and Underground are planned for the immediate future. This will allow the youth worker to assist their clients at first stages of tenancy and heaith advice. 2
3.12 3.13 3.14 3.15 3.16 4 The Prisoners Debt Advice Project (Saughton Prison) funded by the Scottish Executive, referred to in the report to the Executive on 1 February 2005 (Review of Debt Advice Partnership Service Provision - Court Legal Representation Update and Progress on Other Debt Advice Initiatives), commenced in November 2004. Up until end of March 2005 there were 98 new cases. So far this year we have taken on 74 new cases. During the five months, the dedicated Debt Adviser at the prison has set up regular information sessions for the prisoners. In addition, an induction meeting is held every Monday with newly admitted prisoners and a living skills class every Tuesday for prisoners due to be released. It is proposed to introduce an informal advice session in the Family Visitors Centre -this will allow families who are visiting to take advantage of the service whilst visiting their respective family member. In relation to the Use of Additional Scottish Executive Funding which was to Enhance Debt Advice Service Provision Across Edinburgh and was detailed in a report to the Executive on 15 March 2005, [See paragraph 5.1 below - E 105,000]. Three new Debt Advisers and one Support Assistant have been recruited and are now in post. Secondly, I can advise that the uptake by new and existing clients to use the proposed late night opening service at the Advice Shop has been disappointing, as no clients have taken up the offer of an appointment. This service has been offered to new and existing clients, by word of mouth, since May 2005. It is intended to withdraw this service with immediate effect. The Debt Advice service would, however, continue to remain as flexible as possible to meet client needs. Assessment summary Scorecard Dimension - Leadership 4.1 4.2 4.3 Environmental and Consumer Services are committed to Council s approaches for the City and Debt Advice and have clear Policy Statements (currently being updated) setting out this commitment. This includes monitoring clients over 60 years old who are in debt and ethnic minority clients who are experiencing personal debt problems. Statistical information included in Leader s Report in April 2005 indicates that, during the period 1 April 2004-31 March 2005, of the 1671 new cases, some 4.9% (82 clients) were from black or ethnic minority groups and 4.2% (70 clients) were over 60 years of age. As detailed in the report to the Executive of the Council on 8 November 2005, the anticipated rise in new debt cases (clients) is likely to be in the region of 230 in the current year. This gives a projected number of new cases for 2005-2006 of 1990, a 14% increase in cases, with some 38% increase in debt handled. Scorecard Dimension - Impact 4.4 Debt Advice impacts on four of the five key justice themes: 3
Health lnequalitv - Service Plan objectives include projects in relation to "protecting vulnerable young and old". The Debt Advice Team works closely with mental health agencies. They have referral routes from Community Psychiatric Nurses, Social Work at The Royal Edinburgh Hospital, and carry out a surgery at lnchkeith House - in partnership with Social Work and National Health Service - and have referral from support agencies assisting clients with drug dependency. Public Safetv - Through Legal Advice Partnership, access is given to clients who would be unable to access Legal Aid assistance in cases not suitable for lay representation, at no cost to the client. Vulnerable young people and adults can receive court representation in eviction cases and Small Claims Court, keeping people in homes, and giving assistance when leaving care. Equalities and Social Justice - The Debt Advice Service are committed to the Council's Equalities Policies. They are involved in giving advice to all groups in society and are presently running a pilot scheme funded by the Scottish Executive, giving advice in prison direct to prisoners, and are available on a surgery basis to visiting prisoners' families. Through the Council's Elderly Forum, they support and encourage elderly clients to claim any unclaimed benefits they may be entitled to, in order to maximise income in all debt cases. Economic Inclusion - The service is free to all clients and advice and assistance is given up to and including court access to free legal advice. Prevention of Exclusion - The Debt Advice Team undertake educational work including talks, workshops and presentations to youth groups, primarily by the Young Persons Debt Adviser, who manages the Young Persons Texting Service. This service is a pilot scheme fully funded by the Scottish Executive. Talks are also given to clients through the Council's New Deal Scheme. In addition, training sessions are held regularly for voluntary sector agencies and other Council departments. The most recent link to be made is with Young Scot, who recently opened a new money advice help-line. Young Scot also acts as a sign-poster to the Debt Advice Team. Scorecard Dimension - Joined up working 4.5 The Debt Advice Team is the lead member of the City's Debt Advice Partnership (DAP). The DAP was set up to expand accessibility to Debt Advice services across the City. The current member organisations are: The City of Edinburgh Council, all five Citizens Advice Bureaux within the City, Wester Hailes Community Help and Advice Initiative (CHAI) and Granton Information Centre (GIC). The Debt Advice Team also works closely with the Scottish Executive, in particular under its Vulnerable Groups projects (Young People and Prisoners). The Accountant in Bankruptcy, mainly, in relation to the new Debt Arrangement Scheme legislation. Money Advice Scotland as the professional body in Scotland supporting Money Advice providers. Other Council departments, including Housing, Housing Court Section, Social Work, Welfare Rights and Revenues and Benefits. Other links include: Capital City Partnership, Insolvency Practitioners, Solicitors, National Health Service, Banks and Building Societies, Sheriff Officers, Young Scot and other youth organ is at ions. Scorecard Dimension - Customer involvement 4.6 The Scottish Executive Vulnerable Groups projects are both monitored by Glasgow Caledonian University on behalf of the Scottish Executive. The Debt Advice Team, under the Council's Anti Poverty Strategy, carry out customer service exit questionnaires. In addition, the Debt Advice Team Management 4
(Divisional Officer, Retail and Advice, and/or the Advisory Services Manager) attend all Debt Advice Partnership meetings and training events. Scorecard Dimension - Resources 4.6 These are provided by core Council funding and the Scottish Executive. The total monetary resources provided for delivering the Council's Debt Advice Service and the Debt Advice Partnership are as follows: 0 Core Funding f 108,531 Scottish Executive Funding f 321,492 0 Grants to Voluntary Sector f 169,823 0 Advisory Services Manager (core funding) f 37,984 TOTAL f 637,830 TOTAL (less Grants) f 468,007 Additional funding is provided to the Council by the Scottish Executive to deliver the two pilot projects: 0 f64,646 - Young Persons Texting Project 0 f56,500 - Prisoner Project at Saughton Prison When considering the cost of providing the Council's Debt Advice Service and the Debt Advice Partnership Service, the cost per capita overall, assuming a population of 450,000, is f 1.42. If the grants to the Voluntary Sector are removed, this makes the cost per capita, again assuming 450,000, f 1.04. However, if we only consider the core funding provided by the Council, then the cost per capita is less than f0.33. 4.7 5 5.1 5.2 5.3 For the 1900 cases quoted at paragraph 3.4 earlier in the report this would equate to f235 per case (not including Grants to Voluntary Sector). Developments and the way forward The Department has sought to improve access to the service for existing clients through longer opening hours for appointments, but this proved unsuccessful with low take-up. It is, however, intended to discuss the best type of arrangement for face to face advice work with the Debt Advice Partnership agencies at future DAP meetings. There is ongoing work with Capital Credit Union in relation to them becoming a payment distributor for clients under the Debt Arrangement Scheme. Additional education initiatives are in progress, including links with youth groups and prisoners and their families, in particular talks on life skills on exit from prison. As noted in the section on Impact, new cases are continuing to increase with 1990 cases projected for 2005/06. There is a continued commitment to support 5
Debt Advice Partnership agencies in expanding debt advice services throughout the city. This includes development of the Money Advice Computer System (MACS) to record cases and allow standard statistical reporting to the Scottish Executive. In addition, there is a commitment to supporting Debt Advisers in obtaining Approved Adviser status under the Debt Arrangement Scheme. Finally, the Environmental and Consumer Services Debt Advice Team are working towards attaining accreditation to the Housing Homepoint Standards in Money Advice. 6 Conclusion 6.1 The new services funded by the Scottish Executive, the Council and supported by local partners meets a need identified clearly in national and local surveys of advice requirements, and in the experience of advice agencies in the city. The escalating caseload confirms the scale of need. 7 Recommendations 7.1 That the Debt Advice Team continue to work in partnership with the voluntary agencies within the Debt Advice Partnership. 7.2 That the Debt Advice Team continue working towards accreditation in Housing Homepoint Standards in Money Advice. 7.3 That the Debt Advice Team continue to respond to and be involved in discussions and consultation with the Scottish Executive, Money Advice Scotland and Citizens Advice Scotland in regard to the proposed changes in the Bankruptcy and Diligence Bill. 7.4 That the Debt Advice Team continue working with Capital Credit Union particularly in the development of payment distribution mechanisms. Director of Environmental and Co J M Drew 6
Appendices None Contactltel Neil Geddes, Divisional Officer, Trading Standards 0131 469 5460 Wards affected Background Papers All No 1 - Review of Debt Advice Partnership Service Provision (Item 20, Report to Executive of the Council, 1 February 2005) No 2 - Update on Young Persons Debt Advice Project, Etc (Item 61, Report to Executive of the Council, 15 March 2005) No 3 - Use of Additional Scottish Executive Funding to Enhance Debt Advice Service Provision across Edinburgh (Item 44, Report to Executive of the Council, 15 March 2005) No 4 - Update on Debt Advice Partnership Service Provision, Etc (Report to Executive of the Council, 8 November 2005) i:\tvnist-data\comrcp\os\sj&op.debtadvice.ng 23 December 2005 7