Tayside Public Debt Project An Example for the Rest of Scotland to Follow

Aberlour Children's Charity has today, here in Dundee, told senior Labour politicians that their Tayside pilot into public debt recovery practices offers an example for the rest of Scotland to follow.

Aberlour informed Scottish Labour Finance Spokesperson and North East MSP Michael Marra MSP and Paul O'Kane MSP, Labour spokesperson Social Justice and Social and Equalities about the success of Aberlour's innovative anti-poverty initiative, the Family Financial Wellbeing Pilot.

Working with three Tayside local authorities, the Aberlour initiative undertook a series of innovative interventions, including the payment of involuntary public debts such as council taxes or rent arrears, enabling families to afford essential expenses such as food and clothing as well as Christmas gifts and specialised sensory toys for children with disabilities.

The Tayside pilot clearly demonstrated that debt to public bodies is a key factor in entrenching and increasing poverty and child poverty, and that new ways of tackling public debt, including debt write off, can help stabilise and reset families whilst at the same time help the public purse make significant savings.

This types of savings made by public authorities through new and unique ways of recovering debt, including debt write off, includes removing the cost of re-housing families after evictions and/or reducing the risk of children going into care, which could potentially cost councils hundreds of thousands of pounds.

The Aberlour Family Financial Wellbeing Tayside Pilot identified systemic shortcomings in debt collection practices, particularly the lack of coordination among public debt collectors (75% of the debt owed by the families involved in the Tayside project was public bodies). This often resulted in simultaneous deductions from wages and benefits by multiple public agencies, exacerbating financial hardship for disadvantaged families.

Aberlour’s CEO, SallyAnn Kelly OBE, said:

We currently have a system that prioritises debt repayment over ensuring families can feed and clothe their children. The state must serve as a safety net, not a financial trap.

“We need to see comprehensive reform of debt collection practices by public bodies and governments must take proactive measures to address the escalating debt crisis faced by disadvantaged families and help not hinder them as they seek to reset their lives.”

“The Aberlour Family Financial Wellbeing Pilot had a clear and demonstrable beneficial impact, and stands as a model that can be implemented nationwide as part of a concerted effort to alleviate the burden of debt on disadvantaged households and help tackle child poverty. 

"We hope that politicians across all political parties reform and improve the way debt is recovered as well as looking to prevents the reasons why people fall into debt in the first place.

Maria's Story

Maria*, aged 24, is currently in receipt of Universal Credit for herself and her 4-month-old son, Rory*. Her financial situation is significantly impacted by deductions from her Universal Credit for an advance payment and outstanding court fines. She is also receiving Child Benefit but had not been receiving the Scottish Child Payment.

Maria is on a recovery journey and has been engaging with Aberlour’s support services for approximately six weeks. During this time, historical council tax debts were identified, including a debt amounting to £2,288.63 that originated in another city but continued to follow her. Maria had not previously applied for the 25% single person council tax discount or exemption based on her care-experienced background.

Through a collaborative effort between Aberlour and Welfare Rights services, Maria received intensive support to maximise her income and apply for all relevant benefits. Welfare Rights workers intervened to reassess her council tax liabilities and successfully argued that, as a care-experienced young person, she was exempt from council tax. As a result, the full debt of £2,288.63 was written off. The increase in her income supported repayment of the advance payment and court fines, there was not need to access the hardship fund.

This joint working enabled Maria to remain engaged with support services and alleviated significant financial stress, giving her the opportunity for a fresh start. The resolution of her debt and the securing of appropriate benefits marked a major milestone in stabilising her financial and emotional well-being as she continues her recovery journey.

*Names changed.