Blog: How debt being pursued in our name is trapping children in poverty

Menacing heavies with their foot in the door might be the stuff of stereotype and soap opera but there are other debt collectors inflicting unnecessary hardship on families in Scotland today and doing so in our name.

It is now beyond doubt - thanks, in part, to the research commissioned by our charity and others - that how the public sector pursues debt like council tax and rent arrears is, in many ways, harsher and more punitive than the private sector. 

While governments, at national and local level, work to reduce child poverty and ease its toll on the lives and life chances of young Scots, the public sector is chasing debt in a way that is trapping families in a cycle of seized benefits, missed payments, new loans and extortionate interest.

As councils’ software grinds through the process of debt collection, it can be difficult, sometimes impossible, for families to speak to an actual human and the advance of technology will only increase automation and reduce opportunities to press pause and find a better way forward for families.

Public debt – like council tax, rent, and utilities - is exacerbating child poverty and its collection must be overhauled to protect families on the brink of financial crisis.

On Monday [17 MARCH], Aberlour, along with the University of Glasgow’s Centre for Public Policy, will host a landmark conference when key note speakers including Shirley-Anne Somerville, the social justice secretary, will detail the impact of public debt and how it underpins child poverty.

Politicians often talk about child poverty and how much is being done to ease it but the impression is often of a crisis so vast and intractable that it is impossible to know where to start? Well, we can start with public debt.

Aberlour is celebrating its 150th anniversary this year and, while much has changed in our work and  how we do it, there are threads running from the refuge we offered “mitherless bairns” in a Speyside orphanage in 1875 to the care and love we offer children and their families today.

Our Urgent Assistance Fund, for example, has rushed millions of pounds to families in recent years to buy clothes, food and heating. These are not families unwilling to pay bills or blithely ignoring the legal letters and final demands. They simply do not have the money and, often, have even less as up to 40% of their benefits are clawed back to recoup arrears.

Increasing and untenable debt only worsens all the other social issues linked to poverty from poor housing to ill health. Domestic violence and its aftermath, for example, runs like a seam through applications for urgent assistance. Financial abuse – attempts to stop women getting, using or keeping money after they leave abusive partners – is common and the way our public bodies pursue debt (often run up then hidden by their exes) makes them unknowingly complicit in that abuse.

MSPs on Holyrood’s Social Justice and Social Security Committee will soon investigate the financial pressures on women fleeing abuse and will hopefully chart a course for organisations to ensure they are not unwittingly helping abusers and punishing survivors.

Change is possible. Last year, we successfully campaigned for Scottish Government to help write off £2.8m of school meal debt. It was welcome and impactful but the same kind of thinking, the same acceptance of how families are being trapped by debt, is needed across the public sector.

It makes no sense for governments to give with one hand and take with the other, for ministers to promise to ease the lives of families struggling to get their heads above water while organisations, acting on their behalf, are pressing them down. It also makes no sense, incidentally, that council tax arrears from 20 years ago can be pursued in Scotland but are written off after six in England.

Effective relief, including potential amnesties, for public debt must be integral to wider efforts to ease the poverty crisis. One cannot succeed without the other and there are better, more humane, and less destructive ways to collect – or even cancel – these debts. We should see many of these unpaid debts as a red flag, a sign that a family might be struggling, and a pound spent on intervention and support will be recouped far quicker than one spent chasing unrecoverable debt. 

Research suggests payments to families in Scotland receiving Universal Credit are reduced by almost £1000 a year because of public debt and far too often one council department will have no idea another is taking money from the same family.

Our three-year pilot programme in Tayside, supported by The Robertson Trust and the Corra Foundation, has seen us work with three councils to trial new ways of collecting arrears and has underlined the need for a new and national framework for public debt recovery.

It has shown how local authorities can recover debt differently, in a more compassionate way that can help families escape poverty and not risk making their financial situation even worse.

That means families keeping their homes, children not going into care, and parents being helped back into work. The benefits for our country – never mind the savings on future health care and support services – would be immeasurable.

Across the country, there are huge disparities, from councils swiftly writing off debt after accepting it will never be recovered to others using expensive sheriff officers to pursue tiny amounts. The public sector must recover debt differently, in a more compassionate, empathetic way that will help families escape poverty not risk making their financial situation even worse.

More understanding, communication and discretion in pursuit of this debt will cost nothing while the rewards, for children, their families, and our country, would be priceless.

SallyAnn Kelly OBE

CEO of Aberlour Children's Charity

This article was written for The Scotsman and published on Tuesday 11th March 2025.