Debt adviser redundancies increasingly likely at Citizens Advice

Citizens Advice has told chief officers of local bureaux and sub-contracted independent services that it is "increasingly likely" it will "have to implement a programme of reducing the number of employed debt advisers across the service, which we know could result in compulsory redundancies"¹. The warning came in an e-mail from its Head of Funded Services, leaked to the Centre for Responsible Credit and reported on 10 March 2023¹.

The e-mail said a freeze on adviser recruitment, already in place for several months, had failed to deliver the savings required¹. The pressure follows a cut in grant funding from the Money and Pensions Service (MaPS), an arm's length body of the Department for Work and Pensions¹. MaPS funding for local services has been cut by 9% for the next financial year, a figure the Centre for Responsible Credit puts at closer to 20% in real terms once rising service delivery costs are counted¹.

The report says MaPS was incentivised by government in recent funding rounds to put most of its debt advice budget into new national contracts delivering advice by digital and telephone channels¹. That led to proposals last year to cut community-based services by 50%, which were dropped after protests from the sector, local authorities and a campaign led by Emma Hardy MP¹. MaPS then eliminated one of its three proposed national contracts for Debt Relief Order "hubs" and reallocated underspends, providing a temporary extension to community-based grants to the end of 2022/23 on the same terms, with no increase for cost pressures¹. The report says around £4 million a year more for community-based services would have helped the sector cope with cost-of-living pressures¹.

The report also notes leadership changes at MaPS: Sir Hector Sants has been replaced as Chair by Sara Weller, and the previous debt commissioning lead, Craig Simmons, has departed¹. It says MaPS has established Adviser Panels to inform future commissioning¹.

Why it matters for households

Community-based debt advice is delivered through local Citizens Advice Bureaux and independent advice agencies¹. If employed debt advisers are made redundant, the capacity of those services falls, at a time when the report says cost-of-living pressures have led to rising demand and increasingly complex casework¹. People seeking help with debt problems through a local service could face longer waits or reduced availability, though no timetable for any redundancies has been reported¹. The report says the recruitment freeze has already reduced sector capacity¹.

What happens next

A consultation on changes to community-based provision is expected to start in the latter half of this year and run through 2024¹. Protests were planned for Monday, organised by the Unite Debt Advisers Network outside DWP, HM Treasury and MaPS offices, with demands including an increase in the levy on lenders to pay for an expansion of community-based services¹. The report names Laura Trott at DWP and Andrew Griffiths at the Treasury as the ministers responsible for decisions about the MaPS budget¹.