MaPS to increase funding for debt advice services

The move represents a significant increase from the funding levels pre-pandemic, which totalled £43m in 2019/20. It’s also an increase from its business as usual funding for debt advice services in 2020/21 and 2021/22 - excluding the additional funding received in response to the pandemic. 

Of those that bidded for contracts to supply debt advice services in England, MaPS has said it will allocate £37m to national services, £3m to business debt and £6m to debt relief order administration hubs. 

Towards the end of 2021, the statutory body said that it had concerns that some of the debt advice services being offered at a regional level would not adequately meet the needs of people in vulnerable circumstances. It therefore believed that proceeding with this would not be in the best interests of people who need debt advice. 

Following on from this, it has decided to maintain grant funding levels for regional services at similar levels in 2022/23 to currently. 

Once the new contracts are in place across its national, business and debt relief order administration hub services, it’s MaPS’s intention to fund regional services at £30m per annum. This is until it concludes its work with the sector to identify the best approach and level of funding required to deliver local services. 

The statutory body first launched a procurement exercise to recommission debt advice in England in July 2021, in order to achieve its goal of making debt advice available to two million more people each year across the UK. 

However at the time a number of MPs, organisations and campaign groups expressed concerns that the way funding had been allocated under the new commissioning would lead to a significant drop in the volume of debt advice that is delivered face-to-face. 

This led to calls from charities and debt advisors calling for MaPS’s original plans to be paused and reassessed. Responding to the update from the statutory body, charity the Money and Mental Policy Institute’s chief executive Helen Undy said the effective 50% increase in funding for face-to-face debt advice is “absolutely the right thing to do”. 

She explained the move would protect “vital services that are relied on by so many people, particularly those with mental health problems who can struggle to use online or telephone advice”. 

She added: “We’re delighted that the Money and Pensions Service has listened to our research, and to campaigners who have been calling for this change.”