Free debt advice scrapping delayed

Saturday, 12 February 2011 12:00 AM

By politics.co.uk staff

Plans to end free face-to-face debt advice have been shelved by the coalition for one year.

The government has found £27 million to keep the financial inclusion fund (FIF) service, which makes around 500 advisers available to those struggling with debt, running in 2011/12.

Ministers hope that those struggling through Britain's stagnant economy will be boosted by the news. Treasury minister Mark Hoban said he wanted to see debt advice "put on a more sustainable footing" in the future.

"While the government has maintained funding for this programme, it provides only a small part of the revenue necessary to keep the Citizens Advice network fully functioning," business secretary Vince Cable said.

"I would like to take this opportunity to call on the other funding streams, such as from local authorities, to help provide whatever support they can to keep this excellent service going."

The news followed pressure from Labour backbencher Yvonne Fovargue, who wrote a comment piece for politics.co.uk three days ago.

"With the withdrawal of the FIF funding, coupled with the other local funding cuts to advice agencies, access to specialist help will be severely restricted," she wrote.

"It is imperative that the government review urgently all the funding for free independent debt advice and ensure that face-to-face access is available in trusted and competent advice agencies."

Debt relief orders will change in April, making more people eligible for this solution. Last year 580,000 people used the Citizens Advice Bureaux service.

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• economy
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• economy and finance
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• recession