Funding and operating models of the debt advice sector

• Context
• The study
• Key findings
• Points to consider

Context

One of the goals of the UK Strategy for Financial Wellbeing is that two million more people who need debt advice will be accessing such services by 2030. MaPS has a considerable evidence base relating to debt advice customers. However, most of this relates to the pre-pandemic environment and before the recent increases in the cost of living. These changes to the economy and society will have an impact on the cohorts of people seeking debt advice and how it will need to be delivered. MaPS is seeking to build more up-to-date evidence through independent insight gathered via research projects. This report is designed to support MaPS’s decision making for future rounds of debt advice commissioning. It sets out key themes and challenges facing debt advice providers and suggests some areas of consideration to prompt debate and discussion ahead of the any commercial activity.

The study

The study was primarily qualitative and used a combination of semi-structured interviews and observations as the main insight-gathering activities. A rigorous planning process led to a statement of key lines of enquiry, which in turn shaped the insight capture process and the desired participant base.

The interviews comprised 15 Local Authorities, five Housing Associations, Central and devolved government bodies and relevant agencies and ten providers (representing different delivery models) and were carried out by interviewers who were subject matter experts. The stakeholder participants were drawn from across the UK to ensure that the research was geographically representative.

The blend of stakeholders evolved as the research progressed due to challenges in engaging with some stakeholders and the identification of additional stakeholders with the potential to add further insight to the research.

The research was commissioned by MaPS and conducted by consultancy company 40C.

Key findings

The report explores insight, learning and considerations across four themes:

• Theme 1: Funding sources and pressures on funding for debt advice. The sector’s funding is perceived to be under pressure and there are some material gaps in funding which hold providers back from growing, innovating, and offering a holistic service
• Theme 2: Lack of consistent operating models across the sector to base a service offer against. As demand and complexity grow, there are challenges to integrating debt advice alongside other specialist support services to develop effective, holistic approaches.
• Theme 3: Client needs do not always align with a narrow interpretation of debt advice. In most cases, the needs of people are broader than debt advice alone and MaPS can consider this in its funding approach. To work most effectively with stakeholders, there is also a need to reaffirm knowledge and awareness of MaPS’ role, its current strategy for funded debt advice, and its longer term aims.
• Theme 4: The approach used in the commissioning exercise launched in Summer 2021 was not closely aligned with the current capabilities and priorities in the debt advice sector. There are opportunities for MaPS to use approaches which have a closer fit to the current sector landscape and/or explore alternative approaches while carrying out iterative improvement activities which drive sector development

Points to consider

• Methodological strengths/weaknesses: The report notes some limitations that resulted from having a short engagement and delivery period, namely that some of the organisations identified for the research did not respond or declined. This was mitigated by inviting other stakeholders. Another limitation was the lack of data on funding, particularly in England.

• Applicability: Of interest to debt advice organisations, local and central government, as well as to those funding debt advice and any stakeholders, such as creditors, interested in helping customers access debt advice.

• Relevance: Highly relevant given the cost-of-living crisis and the likelihood of more people falling into debt and requiring debt advice.

• Generalisability: The research is specific to funding and provision of debt advice in the UK.