The charity StepChange has published a report saying that the problem of mounting personal debt is costing the British economy £8 billion each year because of the burden it puts on state services, and that dealing with mental health problems, housing problems and job losses made up the bulk of that figure.
StepChange believes that the government could save £3 billion if people could be offered effective help.
These conclusions were reached after StepChange undertook a massive piece of research by analysing the records of more than 100,000 of its clients to calculate how much so-called “problem debt” was costing the UK. Problem debt is the debt that people have taken on but cannot afford to repay as required.
The biggest cost caused by problem debt was having to rehouse people who lose their home after falling behind on mortgage or rent payments, often with higher housing benefit payments within the private rented sector.
We all learned at an early age that prevention is better than cure. We constantly hear how politicians wish to invest further ‘upstream’ to prevent problems, and thereby save money in dealing with the consequences. But when it comes to debt advice, politicians seem to have done. 180 degree u-turn.
Yes, the government invests huge amounts in debt advice through services like the National Debt Line but it has all but ended local, face to face, debt advice.
Yes, a national helpline is good, as are online services. But a lot of people seek help for a particular problem when in difficulty, such as when they are facing eviction for rent or mortgage arrears. By face to face engagement with a skilled housing adviser who has the empathy and experience to look beyond the immediate problem, can help the individual take greater control over their affairs without the wider disruption to their lives and the additional cost to the state.
There is still the remains of some brilliant work being done at a local level. In Brighton, for example, we still have some face to face debt advice, not least that funded by the City Council to organisations such as the wonderful MACS. BHT’s own advice centres in Brighton, Eastbourne and Hastings, even though we no longer receive legal aid funding for debt work, can offer some assistance. How much more could we provide if we were once again properly funded, and how much would we save to the public purse, nationally and locally?
Sadly, at this year’s party conferences, no one as far as I am aware, even mentioned legal aid or proper investment in local, face to face advice. With the economy and housing being two of the dominating issues as we approach the election, I wonder why the party leaderships remain so short sighted.