Funders report Q4 October - December 2012

January 2013

Contents

1) MAT update Funding BSA Arrears Seminar MP Portal launch Citizens Advice pilot Partnership Board

2) Assisting clients National Debtline My Money Steps Business Debtline 3) Achieving high quality advice Adviser Support Specialist Support England and Wales 4) Insight and Innovation CASHflow Common Financial Statement Research Sustainable repayment arrangements Quality report for the Money Advice Service Debt and mental health evidence form Policy and consultation 5) Appendices App.1 Funding status Jan Dec 2012 App. 2 National Debtline figures App. 3 Business Debtline figures App. 4 Funders App. 5 MAT Partnership Board members and MAT contacts

5 6 7 8 9

1)

MAT Update

Funding MAT made good progress during Q4 in fostering productive relationships with new sectors. Work with Energy UK included an MP lunch to launch changes to the energy sectors back billing arrangements as well as presenting to Energy UKs debt group. MAT is continuing to work with individual utility companies to help improve their referrals and to provide the best support to customers who are struggling and we are currently running pilots with Scottish Power, British Gas and npower. In addition to work with the energy sector MAT is also continuing to engage further with other utilities including Water. In December, South East Water visited National Debtline and we are currently exploring ways we can work together more closely, building on the work we have done with Wessex Water. MAT is continuing to improve its relationships with debt purchasers, with Arrow Global and 1st Credit visiting National Debtline in Q4 last year. We have also made progress with payday / short term lending sectors with a visit to Cash Converters and the Consumer Finance Association. MAT also presented to the FLAs Consumer Finance Group. BSA Arrears Seminar In November, MAT hosted its second Arrears Seminar for the BSA. The Seminar gave delegates the opportunity to be involved in sessions run by the BSA and to listen to calls at National Debtline and hear about MATs services. The feedback from the event has been positive and we look forward to working with the BSA again in 2013. Launch of the MP portal MAT in conjunction with Turn2Us and the Money Advice Service launched an online portal for MPs which provides them with a single source of information to help MPs and their constituents to find the appropriate sources of advice such as National Debtline or My Money Steps. The portal was launched in Kate Green MPs constituency to a positive reception. The launch of the first version took place in December and following feedback improvements will be made to the portal in early 2013. Citizens Advice Pilot The pilot with Citizens Advice is continuing to go well with National Debtline receiving around 4,000 calls per month in referrals from Advice Line. National Debtline has been able to answer around 75% of these. Partnership Board The Partnership Board was held in October at the Welsh Assembly in Cardiff. The keynote speaker at this meeting was Graham Mowatt from the DWP who spoke to the group about the introduction of universal credit and the DWPs personal budget strategy. The session gave attendees the opportunity to question the DWP on the upcoming changes and what support is being put in place to assist individuals who will be transitioning to the new arrangements.

2)

Providing advice

National Debtline (NDL) In Q4 2012, NDL helped 31,788 clients. The on-going pilot with Citizens Advice accounts for 21% of referrals to the service in Q4 and 22% of referrals for the second half of the year. The calls which the service receives from Advice Line are more complex and as a result the average length of calls has increased. The trends seen in previous months and over the past couple of years have continued with the percentage of clients reporting debts relating to catalogues, council tax, energy, telephone, water and payday loans increasing. The size of debts reported is also continuing to change with debts of 15,000 and above decreasing (43% in 2010, 32% in 2012) and debts up to 15,000 increasing (52% in 2010, 64% in 2012).
25% 20% 15% 10% 5% 0% 2008 2009 2010 2011
Council Tax Mortgages Telephone

Most reported debt types1

Unsecured debt owed

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Q12012 Q22012 Q32012 Q42012

Fuel debt Pay day loans Water

2010
100,000 + 25,000 - 50,000 5,000 - 15,000 None

2011

2012

Catalogues Hire Purchase Conditional Sale Rent

50,000 - 100,000 15,000 - 25,000 1 - 5,000

1 Excluding bank / building society loans and overdraft and credit cards

My Money Steps (MMS) In Q4 2012, MMS had its strongest month for new registrations and advice sessions. Comparing 2012 to 2011, there has been a 82% increase in registrations and a 95% increase in advice sessions. MMS has now delivered a total 38,700 advice sessions. In Q4, the marketing campaign for MMS continued with a mailshot going out to advice agencies and an email going to 2,500 local authorities and housing associations to help raise awareness and referrals. As a result of this there has been an increase in demand for promotional literature from agencies. Business Debtline (BDL) In 2012, BDL helped 25,199 small and micro-businesses with their debts. In Q4 the service was able to help 89% of clients who were attempting to access the service which is the highest percentage in the past five years. MAT plans to continue its work promoting BDLs services and is working to encourage organisations that have large numbers of small business clients to refer where appropriate to BDL.
100% 80% 60% 40% 20% 0% 2010
Agriculture/Forestry/Fishing Manufacturing Services NotKnown

Businessclassification

100% 80% 60% 40% 20%

Amountowed

2011
Construction Mining Transportation

2012
Financeinsurance/realestate Retail Wholesale

0% Nodebtowed 30k50k 2010 >5k 50k100K 2011 5k15k <100k 2012 15k30k Notknown

3) Achieving high quality advice Adviser Support

In Q4 2012, MAT provided 1,531 training places, including 1,402 free wiseradviser places for money advisers within MATs partnership. This brings the total number of free wiseradviser places provided in 2012 to 5,135, exceeding the target for the year. In Q4, a survey was sent to the managers and supervisors of advisers registered on the wiseradviser website. This survey aimed to gauge their level of confidence that wiseradviser training improves outcomes for their clients. The results have been very positive with 93% of managers confident that wiseradviser training improves the outcomes for their clients. There was also feedback from managers that they would like training for their advisers on the welfare reform happening in 2013. As a result a course is now in development and is due for launch in March. Here is some of the feedback from the managers survey This course helped us realise the potential options for delivering Money Advice and how to do this effectively. The knowledge and skills of the tutor were the strength of this course as her knowledge helped us to come back and tailor our service. (How to Deliver Money Advice by Telephone and Email.) The wiseradviser programme allows us to train our caseworkers to a level where they can attend outreaches within the community and rely on their training and not on computer based information which they would not have access to while out of the office. The advisers who have done recent training feel more confident in the advice that they are giving and only refer to supervisors for areas they have yet to cover within the training. 2007 Number of F2F courses Number of training places Incl. distance, e-learning & FIF core courses Financial Inclusion Fund CPD places Total training places 83 5,356 n/a 5,792 2008 108 5,065 302 5,870 2009 2181 7,706 412 8,310 2010 320 5,984 567 6,125 2011 295 5,345 237 5,817 2012 272 4,776 359 6045 Q1 12 73 1,257 294 1,720 Q2 12 77 1,288 415 1,804 Q3 12 47 904 72 990 Q4 12 75 1,327 129 1531

Specialist Support England and Wales

Support for insolvency cases continues to be the most popular enquiry area with 386 cases representing 40.3% of the total enquiries the Specialist Support money advice team deals with. In addition to the subjects listed in the table, other areas with a high number of enquiries were council tax (39, 4.1%) and Overpayment /CSA /Tax (32, 3.3%). Case Type New cases Case contacts Cases with 3 or more contacts New cases non CABx No. of different agencies No. of different non CABx agencies FIF cases Query Type Insolvency Consumer credit Other/ miscellaneous Mortgages/ secured loans DCC (County Court) Bailiffs Limitations 2009 4,437 10,437 724 462 706 221 1,128 2009 1,507 575 448 259 464 155 163 2010 5,135 11,887 1,012 972 701 210 1,435 2010 2,180 550 384 267 446 166 193 2011 4,802 11,186 926 969 680 214 1,322 2011 2,043 295 718 211 440 207 207 2012 4,353 10,198 855 803 1507 354 1,292 2012 1.883 281 374 203 325 191 167 Q1 12 1,195 2,852 226 246 404 111 348 Q1 12 519 82 102 59 75 60 48 Q2 12 1,164 2,544 207 185 382 91 353 Q2 12 532 74 83 62 69 43 48 Q3 12 1,036 2440 215 189 366 74 309 Q3 12 446 58 109 35 90 36 45 Q4 12 958 2362 207 161 355 78 282 Q4 12 386 67 80 47 91 52 26

4) Insight and Innovation CASHflow In Q4 2012, MAT continued its work to promote CASHflow, activities included a workshop for AdviceUK members and an article in Quarterly Account. To ensure that CASHflow is achieving one of its aims and is accepted by creditors in the same way as a CFS budget a survey was conducted with National Debtline clients who have used CASHflow. The results were positive with a high level of success for clients selfnegotiating and using CASHflow, the survey results also showed the there were no significant gaps in creditor recognition. Common Financial Statement (CFS) Over the course of 2012 a number of surveys were conducted focusing on the CFS and data analysis was undertaken on the budgets of over 7,600 National Debtline clients budget sheets to help inform the validity of the trigger figures. In 2012, an adviser and creditor survey was also completed and this showed that 83% of advisers and 80% of creditors thought the CFS creates realistic and sustainable budgets and that 94% of creditors thought from their experience of CFS offers that they were happy to support creditor commitment to the CFS. The result of all the research was presented to the CFS sub-group and will be used to help update and improve the CFS. Research on sustainable payments As highlighted in the Q3 report, MATs, Lloyds Banking Group sponsored research on sustainable repayments was launched in November. This research received a significant amount of coverage in the media, including articles in national and trade press. Following on from the launch of the research a roundtable with MPs has been organised for the 13th February to discuss the research and its implications. Quality report for the Money Advice Service MAT was commissioned by the Money Advice Service to provide an oversight on the quality framework that could be used across the fee and free advice sectors. This report was submitted to the Money Advice Service in Q4 and will help to inform their strategy on quality, accreditation and individual qualifications. Debt and Mental Health Evidence Form At the November Money Advice Liaison Group Conference, Joanna Elson launched the latest version of the Debt and Mental Health Evidence Form. The new form aims to help individuals who use self-help or assisted self-help and is a positive step in the continued development of the Debt and Mental Health Evidence form and guidance. Responses to policy/consultation papers In Q4, MAT submitted a response to Ofgems consultation on their vulnerable consumer strategy. Whilst welcoming the Ofgem approach to vulnerability, suggestions were made as to how measures such as the Common Financial Statement and the breathing space concept could be incorporated. A response was also submitted to the OFT on their consultation on new powers to suspend licences. MATs response broadly welcomed the draft guidance which explains how the OFT expects to use their new powers which are expected to come into force from April 2013. Ministry of Justice response to consultation on bailiff reform The Ministry of Justice response to the bailiff reform consultation has now been issued. MAT is part of an advice sector group looking at how it can inform the debate and change policy on this issue as there are serious concerns that the announcements will do little to improve bailiff practice as there remains no independent oversight or complaints body, and no clear sanctions for bailiffs who break the rules. If an amendment to the Crime and Courts bill is accepted by Government, the Legal Services Board would become responsible for bailiffs and would provide an independent route for complaints to the Legal Services Ombudsman. OFT interim report on payday lending compliance The OFT have published their interim report on their payday lending compliance review and expect to publish their final report in February / March 2013. MAT attends the working party on the new Customer Charter which looks at how it works in practice in dealing with problems and National Debtline advisers are involved in the cross-sector campaign being run by Citizens Advice which is monitoring the effectiveness of the charter over the next 12 months. Related to the payday lending debate, MAT helped to brief members of the House of Lords on the amendment to the Financial Services Bill in which Government has enshrined enabling powers for the FCA to cap interest rates as part of the Act.

5) Appendices Appendix 1 - Funding status Jan Dec 2012

INCOME

Private sector Government Self Generated Income including Investment

Case for Support 2012 Target 5,808,000 2,489,000 1,650,000 9,947,000 Case for Support 2012 Target 5,940,280 (1,550,000) 1,084,280

Actual to Year End 2012 6,251,416 1,668,983 1,790,544 9,710,943 Actual to Year End 2012 (a) (b) (c)

TOTAL
PROPOSED ALLOCATION

DIRECT SERVICE PROVISION National Debtline - Income Generated Business Debtline ADVISER SUPPORT SERVICES Adviser Support - Income Generated Research, Policy & Information Grants & Contracts Face To Face Debt Advice Project

5,909,658 (1,620,972) 1,166,004

(d) (e)

1,394,640 (112,500) 399,800 1,065,000 63,000 9,947,000

1,255,152 (79,868) 419,871 1,234,748 174,378 10,159,809 (448,866) 5,903,963 3,750,000 1,705,097

(f) (g) (h) (i) (j)

TOTAL Surplus/Shortfall Brought forward from 2011 Reserves including Contingency Carry forward to meet commitments in 2013 (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k)
(l)

(k) (l)

Private sector income up on original forecast. The Funding Model Working Party is helping to widen the net. One year agreements agreed with key funders. Includes contributions for both NDL and BDL. BIS contributes 1m pa to NDL, 225k BDL, 100K pa from MoJ and 110K from the Scottish Government. Drop in Government funding is due to loss of emergency funding from the 2008 pre-budget report. This includes income derived from Debt Management Plans as well as commercial activity undertaken by MAT such as selling training. Additional expenditure linked to overhaul of websites. Additional staff to help meet demand plus websites. Adviser Support incorporates wiseradviser training and the Sector Support budget, which includes My Money Steps. Income generated from the selling of MAT services such as training and consultancy. Broadly in line with budget. Budgeted figure anticipated that further cuts would be made. The original budget was based on one quarter payment from BIS. The Money Advice Service subsequently confirmed their support to continue face to face training Designated funds from previous year for certain projects has been carried forward and used to off-set the additional expenditure. MAT auditors suggest that, given the current uncertainties and economic climate, reserves of up to 9 months running costs is considered prudent.

Appendix 2 - National Debtline figures

2008 Calls answered 171,647 Emails 7,971 Literature 2,476 Total clients 118,120 % of tel clients who attempted to access 79% the service and were helped Calls - Scotland (%) 4.85% Average duration of 16m 16s advice calls Clients referred: F2F debt advice other advice DMPs to CCCS / Payplan Income from DMPs Top 6 Referrals (%) Internet Citizens Advice Line Creditor Advice Agency Friend / relative Media Phone book Most Reported Debt types 2008 Bank BSoc Loans Overdrafts Catalogues Council Tax Credit Cards Charge Cards & Store Cards Fuel debt Hire Purchase Conditional Sale Mortgages Pay day loans Rent Telephone Water Debt owed No debt owed > 5,000 5,000 - 15,000 15,000 - 25,000 25,000 - 50,000 50,000 - 100,000 <100,000 NDL Website Unique users Repeat visitors) % Av. Page views Av. Time 66% 10% 15% 64% 9% 7% 18% n/a 7% 5% 4% 2010 2% 22% 30% 17% 19% 7% 2% 2010 515,255 36% 3.78 3.58 2009 68% 10% 15% 66% 11% 8% 12% n/a 11% 5% 4% 2011 2% 26% 31% 16% 16% 6% 2% 2011 491,588 34% 2.92 3 3% 17% 3,047 2009 211,369 12,568 5,594 149,838 63% 7.08% 16m 53s 2010 212,335 8,127 3,600 156,027 85% 5.7% 16m 02s 2011 194,526 7,385 1,210 136,715 86% 4.72% 16m 33s 2012 185,068 5,600 425 130,810 85% 4.6% 17m 06s Q1 12 50,728 1,728 199 36,044 90% 4.64% 16m32s Q2 12 42,011 1,372 89 28,932 84% 5% 16m 34s Q3 12 47,767 1,282 74 34,046 81% 4% 18m 06s Q4 12 44,562 1,218 63 31,788 84% 5% 17m11s

2% 18% 3,714

2% 24% 4,026

3% 28% 3,949

2.5% 26% 2,930

2% 27% 865

2% 27% 616 392,997

3% 25% 819 386,818

3% 24% 630 381,301 Q4 12 31% 21% 10% 15% 7% 2% 2% Q4 12 56% 14% 22% 52% 16% 8% 11% 12% 11% 10% 12% Q4 12 3% 35% 32% 13% 12% 4% 1% Q4 12 107,862 31% 2.69 2.41

912,432 1,126,455 1,312,379 1,505,187 1,558,611 397,495 2008 38% n/a 10% 17% 10% 5% 10% 2009 40% n/a 15% 15% 8% 4% 5%

2010 2011 2012 Q1 12 Q2 12 Q3 12 41% 42% 35% 41% 39% 30% n/a n/a 22% n/a n/a 23% 14% 12% 10% 10% 10% 10% 15% 14% 16% 16% 16% 16% 9% 9% 7% 8% 8% 6% 3% 2% 3% 3% 3% 2% 4% 3% 2% 3% 2% 2% % Total exceeds 100% as clients report multiple debt types 2010 2011 2012 Q1 12 Q2 12 Q3 12 68% 12% 17% 64% 13% 8% 13% n/a 7% 6% 7% 63% 13% 19% 60% 14% 9% 15% n/a 9% 8% 9% 2012 3% 32% 32% 14% 13% 5% 1% Q1 12 140,390 32% 2.79 2.5 58% 15% 20% 54% 16% 8% 14% 11% 10% 10% 11% Q1 12 2% 29% 32% 16% 14% 5% 1% Q2 12 114,637 29% 2.37 2.14 60% 14% 20% 57% 15% 8% 15% 9% 9% 9% 10% Q2 12 3% 30% 33% 15% 14% 5% 2% 59% 15% 19% 56% 16% 8% 15% 11% 9% 10% 10% 58% 15% 21% 53% 16% 8% 15% 11& 11% 10% 11% Q3 12 3% 34% 32% 14% 12% 5% 1%

Q3 12 Due to a problem with the web stats service data is not available for this quarter.

Appendix 3 - Business Debtline figures

Calls answered Emails Literature Total client contacts Total clients % clients attempting to access the service & helped Calls - Scotland (%) Average duration of advice calls Top 6 Referrals (%) Citizens Advice National Debtline Internet CLS CCCS Bank Main reason for contact (%) Bad debts Bailiffs Bank Bankruptcy/ insolvency Business leases Business rates / Council Tax Court proceedings Disputes HMRC tax debt Late payers Other creditors Personal creditors Trade shortfall Debt owed No debt owed > 5,000 5,000 - 15,000 15,000 - 30,000 30,000 - 50,000 50,000 - 100,000 <100,000 Not known Business classification Agriculture / forestry / fishing Construction Finance / insurance / real estate Manufacturing Retail Services Transportation Wholesale Not known BDL Website Unique users Repeat visitors Av. Page views Av. time on site 2008 23,427 n/a 404 23,837 15,500 61% 1.3% 18m 2009 25,785 n/a 1,003 26,788 17,795 65% 2.5% 19m 36s 2008 23% 26% 6% 6% 12% 3% 2008 5% 3% 6% 14% 4% 3% 7% 4% 9% 3% 6% 15% 12% 2010 6% 6% 12% 18% 18% 17% 9% 14% 2010 1.2% 10.3% 4.6% 1.7% 17.7% 51.1% 4.1% 0.8% 8.5% 2011 57,100 27% 4.81 2.54 2010 36,046 n/a 879 38,430 24,594 86% 3.1% 18m 57s 2009 25% 22% 7% 6% 5% 4% 2009 2% 3% 6% 14% 3% 3% 6% 3% 6% 3% 5% 18% 17% 2011 7% 6% 14% 17% 17% 16% 9% 14% 2011 0.9% 9.5% 5.3% 1.3% 16.6% 54.9% 3.3% 6.0% 7.4% 2011 37,746 n/a 374 39,416 26,290 87% 4% 18m 13s 2012 35,317 399 37,779 25,199 86% 3% 18m 42s 2012 22% 30% 9% 7% 4% 5% 2012 2% 3% 5% 12% 2% 3% 6% 4% 7% 3% 7% 20% 13% Q1 12 6% 7% 15% 18% 17% 14% 8% 14% Q1 12 1% 11.1% 5.6 1.5% 18.3% 50.3% 3.8% 0.6% 7.5% Q2 12 16,709 23% 4.66 2.52 Q1 12 9,700 n/a 139 10,499 7,003 83% 4% 18m 55s Q1 12 23% 27% 10% 7% 4% 4% Q1 12 2% 3% 5% 11% 2% 3% 7% 4% 7% 4% 7% 19% 15% Q2 12 6% 7% 15% 18% 16% 14% 8% 15% Q2 12 1% 11% 6% 1.4% 18% 50% 3.8% 0.6% 8% Q3 12 13,355 29% 4.47 2.51 Q2 12 8,321 n/a 104 9,043 6,032 83% 3.5% 18m 54s Q2 12 21% 29% 9% 7% 4% 5% Q2 12 2% 3% 5% 12% 2% 3% 6% 4% 7% 3% 6% 21% 13% Q3 12 8,857 n/a 87 9,375 6,253 84% 3.3% 18m34s Q3 12 21% 31% 8% 7% 3% 5% Q3 12 2% 3% 5% 12% 3% 3% 6% 5% 7% 3% 7% 20% 13% Q4 12 8,439 69 8,862 5,911 89% 3.1% 18m26s Q4 12 21% 31% 9% 7% 3% 5% Q4 12 2% 3% 5% 13% 3% 3% 7% 5% 6% 3% 7% 19% 13% Q4 12 5% 9% 15% 18% 15% 12% 7% 19% Q4 12 1.2% 9.5% 5.8% 1.5% 17.2% 51.5% 3.4% 0.5% 9.4% Q4 12 11,994 28% 4.3 2.44

2010 25% 24% 10% 6% 5% 6% 2010 2% 3% 7% 14% 3% 2% 6% 5% 6% 2% 5% 18% 18%

2011 23% 26% 9% 9% 5% 4% 2011 2% 3% 5% 12% 2% 3% 7% 4% 7% 3% 6% 19% 16% 2012 6% 8% 15% 18% 16% 14% 8% 16% 2012 1.1% 10.4% 5.9% 1.3% 18% 50.1% 3.6% 0.6% 8.4%

Q3 12 6% 7% 16% 17% 15% 13% 8% 17% Q3 12 1% 10.2% 6.2% 0.8% 18.4% 50.7% 3.3% 0.4% 8.7%

Q1 12 15,265 29% 4.89 3.1

Appendix 4 Funders Allied International Credit American Express Foundation Argos Bank of America Barclays Bank plc Barclaycard British Gas (here to HELP) BT plc Building Societies Trust Limited Department for Business, Innovation and Skills Esme Fairbairn Foundation Experian Finance & Leasing Association HM Treasury HSBC Bank plc Insolvency Service Lloyds Banking Group plc Ministry of Justice National Australia Bank Group Nationwide Building Society npower Optima Legal Payplan Ltd Provident Financial Santander SSE Scottish Government Scottish Power Standard Life Step Change Debt Advice Charity Swift Advances plc The Royal Bank of Scotland Group Wescot Credit Services Wessex Water Yorkshire Building Society

Appendix 5 MAT Partnership Board members Advice Providers Advice NI Advice UK Citizens Advice Citizens Advice Northern Ireland Citizens Advice Scotland Institute of Money Advisers Money Advice Trust Money Advice Scotland Payplan Step Change Debt Advice Charity Creditor Sector British Bankers Association Barclays plc British Gas HSBC plc Lloyds Banking Group Santander The Royal Bank of Scotland Group plc

Government and Public Sector Cabinet Office Department for Business, Innovation and Skills Department of Enterprise, Trade and Investment (Northern Ireland) Department of Work and Pensions HM Treasury Local Government Association Ministry of Justice Scottish Government Welsh Assembly Government MAT contacts Money Advice Trust 21 Garlick Hill London EC4V 2AU Tel: 020 7653 9722 Fax: 020 7489 7704 Website: www.moneyadvicetrust.org President Baroness Coussins of Whitehall Park Trustees Martin Hall MVO, MBE, Chair Lady Bloom CBE, Deputy Chair Mike Barley Martyn Gimber Judith Mortimer Sykes Ambassadors Liz Barclay The Rt Hon Sir Ian McCartney Contact details Joanna Elson OBE CDir Chief Executive Tel: 020 7653 9720 joanna.elson@moneyadvicetrust.org Neelam Samra Jenny Watson Claire Whyley Sian Williams Merrick Willis OBE Sir Brian Pomeroy CBE

Jon Elwes Head of External Affairs Tel: 020 7653 9722 jon.elwes@moneyadvicetrust.org