Public sector debt collectors urged to ease child poverty
Scotland’s public authorities are helping trap families in poverty by collecting debt without compassion, experts warn.
Aberlour, the country’s biggest children’s charity, fears the way organisations, including local authorities and benefit agencies, claw back arrears is making it harder for families to escape poverty.
The charity, speaking during Challenge Poverty Week, hailed a landmark debt support service for showing how money owed for rent, council tax and school meals can be collected without inflicting more hardship on families.
In the first three years, the pilot programme has eased the pressure of public debt on families across Tayside, Angus and Perth & Kinross while councils reviewed and adapted collection systems.
Heather Kelly, Aberlour assistant director, said the Family Financial Wellbeing service has been built on partnership with public sector organisations; a better understanding of how families are trapped by debt; and changing how arrears are collected.
The service offers expert advice and direct financial assistance through a hardship fund where the average award was £2700 for each family struggling to clear public debt.
Kelly said: “Almost nine out of ten of the families referred to the service are vulnerable and already trapped in debt. They need support and £2700 is not a lot of money to help them escape poverty.
“It makes a huge difference and the improvement to mental and physical health and family life is immeasurable.
“Poverty is gruelling and can strip the hope from families. They can’t get on top of it and can’t see a way out. They feel like bad parents, that their children are missing out.
“This service shows that can change, that direct assistance, financial help and family support can turn things around.
“People began to see the possibility of a different future for themselves and their families.
All three councils supporting the service, backed by The Robertson Trust, have looked at how debt recovery can be adapted to help keep families afloat while repaying their debts.
Dundee City Council, for example, has introduced a debt collection charter ensuring debtors, possibly owing money to several different departments, now have one point of contact and a single priority payment.
The new approach is built on early intervention to help stop struggling debtors becoming homeless, postpone legal action, and allow Aberlour to help them stabilise finances and build repayment plans.
Kelly said: “We’d like to see that charter adopted by other local authorities along with mandatory training for frontline staff.
“We’d like to see a family’s financial wellbeing become everyone’s concern in the same way that child welfare has become everyone’s concern.
“How we collect public debt can reduce the impact of poverty on children and their families. The two go hand in hand. It is public debt but it has personal impact.
The ground-breaking work of the pilot poverty project will be highlighted at an event in Perth today (Wednesday 9th October), attended by Shona Robison, finance secretary and Dundee MSP, and officers from Scotland’s local authorities.
Martin Canavan, head of policy and participation at Aberlour, said the work of the service to help families find financial stability and escape poverty should be a template for public debt relief across Scotland.
He said the pilot scheme has confirmed how helping change the pursuit and collection of public debt can ease child poverty.
Canavan said: “In Tayside, we have shown how councils can change and improve how debt can be recovered without the immediate need for national legislation.
“The public sector can recover debt differently, in a more compassionate way that will help them escape poverty and not risk making their financial situation even worse.
“It means families prevented from becoming homeless, children prevented from being taken into care, and families being supported back into work.
“These are tangible, practical outcomes that benefit families and their communities.