New Debt Route Map for Scotland


New Debt Route Map for Scotland


Minister for Business, Fair Work and Skills, Jamie Hepburn, has launched a new Debt Advice Route Map for Scotland.

The Route Map will form the Scottish Government’s strategy for ensuring everyone who needs free debt advice in Scotland, can access it.

It follows on from new Regulations that came into force earlier this year in November, that now means anyone who wants to enter the Scottish Debt Arrangement Scheme can do so without having to worry about paying fees, even if they choose to use a commercial firm, like Carrington Dean, rather than charities like Citizen Advice Bureaux.

Scottish Debt Advice Funding Crisis

The background to the Route Map was in January this year, the UK Government devolved the Financial Conduct Authority Debt Advice Levy to the Scottish Government.

This levy is one that the UK financial Regulator charges banks and credit card companies each year to help with the cost of paying for free debt advice.

However, the Route Map also comes on the back of evidence that was given to the Scottish Parliament’s Economy, Energy and Fair Work Committee, by money advisers and some of Scotland’s biggest debt charities.

They painted a picture of a free debt advice sector, made up of Citizen Advice Bureaux and Local Authority Money Advice Centres, that were facing a funding crisis and revealed that between 2014-17, Scottish Council’s cut funding for free money advice services by over 45%.

It is a debt advice funding landscape, that Yvonne MacDiarmid (OBE), Chief Executive of Money Advice Scotland, described as being the worst she had seen in her thirty years of working in the sector.

The Scale of Scotland’s Problem Debts

The scale of problem debt in Scotland was also revealed in the Route Map with it now being believed that it could be affecting up to 14.2% of the population.

There is also “little evidence”, the Route Map states to “suggest the number of people experiencing problem debt will decline in the near future, and many of those who provide frontline advice report that numbers are increasing and will continue to do so”.

Even at current rates, the new Strategy document finds,  there is a clear concern that “demand for debt advice far outstrips capacity to provide it, and that this problem is exacerbated by and a cause of low staff morale and high turnover” in free advice agencies.

None of which is a reassuring picture for people struggling with debts.

As Jamie Hepburn (MSP), states:

“Problem debt can increase stress, put a strain on families and friendships, exacerbate poverty, and, in the most serious cases, result in people being evicted from their homes. And often, it affects those who are already struggling – such as people with mental health issues or low incomes.”

A New Debt Advice Landscape

However, the Route Map also calls for a more collaborative approach to be taken by those providing free debt advice and for new technology to be used to modernise the process for those trying to access money advice services.

This includes the use of online chat services and telephone helplines.

It also calls for new sources of funding to be considered, including the Scottish Government applying its own levy on those that are lending money to help pay for free advice services in Scotland.

The Role of Professional Firms

However, what is also clear is that professional firms like Carrington Dean, also now have an important role in helping Scotland tackle the issue of problem debts.

With the new Debt Arrangement Scheme (Scotland) Amendment Regulations having been passed in November, Carrington Dean, who are already the largest Payment Distributor for the Scheme, are able to offer it’s client’s free access to it, which includes benefits like lifting earning arrestments and freezing interest and charges on all debts that are included.

Speaking about the Route Map, Graeme MacLeod, Head of Operations for Carrington Dean said:

“Scotland is clearly at a crossroad in how it helps people struggling with debt, with many of the traditional charities and public services struggling with a lack of funding and resources”

“One of the big advantages that Carrington Dean has, is it has already modernised its services using technology and with the new Debt Arrangement Scheme rules, no-one is now at a disadvantage if they choose to use our services; like those offered by Stepchange, Citizen Advice Bureaux and other council funded services, ours are free to consumers and delivered on the same basis”.

If you are struggling with problem debts and would like to speak with a Carrington Dean Money Adviser, call 0808 2085 195 or speak with our online adviser.

You could write off up to 75% of unsecured debt with our debt assistant.

Check if you qualify for the DAS


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