home > news >

print page

Welcoming the publication of the Department for Business, Innovation and Skills response to the Public Accounts Committee report on ‘Helping over-indebted consumers’, Joanna Elson OBE, Chief Executive of the Money Advice Trust, said:

‘We welcome this response which shows that free debt advice plays a crucial role in supporting people in these challenging times. Through National Debtline and Business Debtline and through training free-to-client money advisers across the country, the Money Advice Trust is helping hundreds of thousands of people to resolve their debt situation and return to financial health.

The report’s message – that the Government and the money advice sector needs to be working together as effectively as possible – is an important and timely one. Some of the most innovative projects recently have come about as a result of organisations such as MAT, Citizens Advice, Advice UK and others working with Government to help people get back on an even keel.  CASHflow and the Common Financial Statement are two good examples of this[1].

One of the most important points to emerge from the Committee’s report was the recognition that the free advice agencies were delivering value for money. The latest independent research[2] shows that over 80% of people advised by National Debtline feel more knowledgeable about financial matters, are less likely to find themselves in a similar situation again and are more confident about managing their money, which reduces the likelihood of them getting into further trouble later on.

We welcome the Committee’s proposal to evaluate the likely level of future demand for debt advice.  We are already engaged in this work, having commissioned Professor John Gathergood of the University of Nottingham to design a forecasting model, and we would be very happy to share this work with BIS (who are already aware of it) and other key players.

Yesterday’s announcement that unemployment has fallen slightly is clearly good news; however in the last month nearly one-fifth of callers to National Debtline were unemployed, and the pattern in previous recessions is that arrears and repossessions continue many  months after a recession has technically ended. 

At a time when advice is needed more than ever – Shelter reported that over one million people used a credit card to pay for their rent or mortgage in 2009[3]  - it is absolutely vital that Government, lenders and advice agencies work together to ensure people in crisis have the help they need.  Recent figures from the same Shelter report show that it costs the Exchequer £16,000 every time a low income vulnerable family has their home repossessed.  A very modest investment can prevent that financial loss, keep a family in their home and assist them in returning to financial health and well-being.’

Notes to Editors

Money Advice Trust

The Money Advice Trust (MAT) is a charity formed in 1991 to increase the quality and availability of money advice in the UK. MAT’s vision is to contribute to reducing unmanageable debt of UK consumers and its mission is to support individuals in the UK with unmanageable debts and to improve the capacity, quality and efficient delivery of free-to-client independent money advice, through:

·         Co-ordination

·         Influence

·         Direct service provision (National Debtline and Business Debtline)

·         Training

·         Research

·         Information

The Rt. Hon Sir Ian McCartney was appointed MAT’s President (unpaid) in November 2007. Ian McCartney has been a campaigner against illegal money lending and has introduced various government initiatives including the then Department of Trade and Industry’s (now Department for Business, Innovation and Skills) loan shark projects.

MAT has the following trustees:-

• Martin Hall MVO MBE (Chairman)
• Margaret Bloom CBE (Deputy Chair)
• Mike Barley
• Martyn Gimber
• Garry Hunter
• Eva Lomnicka
• Judith Mortimer Sykes
• John Saunders
• Jenny Watson

Footnotes

[1]CASHflow is a streamlined, assisted self-help service designed to increase the availability of help and support to over-indebted consumers who are able and willing to negotiate with creditors with minimal intervention from an advice agency. The scheme has been developed by the Money Advice Trust in partnership with creditors, trade bodies, the debt collection industry and the advice sector. CASHflow is available in all four administrations of the UK and has been piloted over the last six months under an initiative funded by the Department for Business, Innovation and Skills (BIS).

The Common Financial Statement is a budgeting tool that can be used by advice agencies and other third party organisations to make debt repayment offers to creditors on behalf of clients. It provides a detailed budgeting format enabling an accurate overview of a client's income, expenditure, assets and liabilities to be produced

2Illuminas Performance Evaluation of National Debtline, March 2010.

3  Shelter report ‘Outcomes of advice for struggling homeowners’ (June 2010)   

More information: Nathan.alleyne@nationaldebtline.co.uk (0121 410 6277)

back to top