Debt Arrangement Scheme - returning funds to the free advice sector: consultation

Opinion is sought on which of the options detailed in this consultation, for returning funds to the free advice sector, would work best and why.

2. Who will we consult?

2.1 Although we would welcome comments from anyone in the wider DAS stakeholder community who wish to respond to this consultation, the Scottish Government will ask AiB to take forward detailed discussions on the options detailed in this paper with those most likely to be affected directly. The statistics for new DPPs from 1 January 2018 to 1 November 2018 show the following:

  • 26% originated from CAB and local authority advisers, split 15% and 11% respectively.
  • 26% were from private sector CMAs.
  • 48% were from the free-to-client sector (also known as "independents"). the significant majority being from StepChange, with a smaller number from Christians Against Poverty and other similar bodies.

We would expect, and initial discussions support this expectation, that both the "independents" and private sector CMAs will want to handle the payments distribution function for the cases they generate.

2.2 As any legislative change allowing AiB to redistribute fees obtained from payments distribution will therefore most directly impact on CABx and local authority money advice provision, we intend to focus discussion on that 26%.

2.3 There are currently 44 individual CAB offices and 18 local authority money advice organisations registered on the DAS case management system, DASH, with a live caseload. SG will therefore ask AiB to seek advice from Citizens Advice Scotland, Money Advice Scotland (membership including Shelter and Gordon Rural Action), COSLA and IRRV as the most appropriate people with whom we should discuss these proposals beyond those organisations. This consultation will also be available to the public both through the SG's consultation hub and via AiB's website (which includes a tool that will notify all those registered with AiB that the document is available).

2.4 In addition to the proposed discussions with people in the space, AiB have already contacted the Scottish Legal Aid Board (SLAB) to seek their views on how any funding is distributed, particularly with reference to the provision of advice, and against the background of the recent Advice Funding Review. Inside the Scottish Government, those officials responsible for the distribution of the FCA Levy Funding for debt advice (previously administered by the Money Advice Service) have also been involved in shaping these proposals.



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