05/02/2010 – Face-to-face debt advice delivering good value for money
A report from the National Audit Office (NAO) has found that the face-to-face debt advice service funded by the Department for Business, Innovation and Skills (BIS) is delivering good value for money but is having difficulties meeting demand following the economic downturn.
The report, Helping over-indebted consumers, found that since it began in April 2006 the face-to-face debt project has helped 270,000 people up to September 2009 at a cost of £311 per person helped, against plans to help 261,000 people at a cost of £330 per person. However, the report also found that while providers reported a 28% increase in the number of clients contacting them between July 2008 and July 2009 a number were either not taking on new clients or had waiting of over four or six weeks. It also found, however, that a number of providers had responded to the increased demand by increasing the amount of advice available within their existing budgets.
The NAO found that those people that had received debt advice from the project said that it had helped, with over 80% saying that it had improved their debt situation and 95% following the advice that they had been given. However, a subsequent investigation by the Public Accounts Committee has criticised the project for turning people away and being 'unnecessarily complex' with over 50 projects involved and a number of different funding streams, as well as calling on the need to use other methods of delivering services such as telephone advice and the internet.
Amyas Morse, the head of the NAO, said:
'The 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 (BIS) 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.'
Responding to the criticisms of the project, David Harker, chief executive of Citizens Advice, said:
'Whilst the recession has seen demand for debt advice appointments increase, bureaux are using new ways of assisting clients to make sure everyone can receive help in the shortest time and that the service is as efficient as possible.'
The report Helping over-indebted consumers is available on the National Audit Office website.