Four ways we're responding to your debt advice funding feedback
Thursday 26 September 2019
The Independent Review of the Funding of Debt Advice produced by Peter Wyman produced a set of recommendations to close the gap between supply and demand for debt advice, including a number on increasing funding for the debt advice sector using existing voluntary mechanisms.
The Money and Pensions Service (MaPS) has been undertaking discussions with stakeholders who raised a number of practical and ‘in principle’ concerns focusing solely on increasing funds through voluntary mechanisms such as Fair Share. MaPS has been discussing options and opportunities to increase funding through all available mechanisms and to bring in a wider range of potential organisations to support, along with a wider variety of mechanisms.
In June, we hosted a round table at which a wide range of stakeholders discussed this broader approach, and also the challenges that any new long term model would need to meet in order to be sustainable. The event was part of MaPS’ listening phase, which gave stakeholders across the UK an opportunity to feed into MaPS’ development of its three-year corporate plan and a new National Strategy for financial wellbeing.
The main messages we took from the event and other contact with our stakeholders, were:
- additional debt advice funding from existing and new sources needs to be accompanied by more substantive reform of funding mechanisms and stronger evidence of the value and benefits that such funding would achieve, and
- developing a sustainable new model should be a high priority for MaPS, and we should consider what additional resource would enable us to arrive at clear proposals as quickly as possible.
Taking these messages on board, we are embarking on the next phase of work in the following ways:
- The work will be led by a new joint working group of MaPS and Financial Conduct Authority (FCA). We are really looking forward to working with FCA colleagues: they have regulatory interest in both the debt advice sector and many of the most important funding sectors; they of course collect the levy and determine how the cost is shared across the firms they regulate; and we hope their involvement will help boost our ability to collaborate with regulators in other sectors.
- We will continue to work with stakeholders across debt advice, funder and creditor communities to identify core design elements of a ‘sustainable new funding model’ in line with the principles we developed earlier in the project.
- Other key consultees throughout the process will be HM Treasury, as any solution must work in harmony with their emerging debt respite scheme proposals, MaPS’ Debt Advice Steering Groupopens in new window and devolved administrations.
- In line with a recommendation at the listening round table, we will procure independent consultancy support to bring additional capacity and important capabilities to the project. This will come on stream later in the year.