Debt
The final item of business today is a members' business debate on motion S3M-5081, in the name of Jackie Baillie, on Citizens Advice Scotland's debt findings. The debate will be concluded without any question being put.
Motion debated,
That the Parliament welcomes the new research findings by Citizens Advice Scotland that set out the barriers and problems faced by vulnerable groups such as lone parents, older people, young people and sick and disabled people in Scotland in relation to debt as well as creditor behaviour; notes that the findings show that four in 10 clients have gone without essentials in order to try to cope with their debt, while one in four clients has borrowed further credit to pay existing debt; notes that two fifths of debt clients reported being pressurised or harassed by their creditors; further notes that two thirds of debt clients said that they would consider going bankrupt in order to manage their debt; believes that schemes such as the Low Income Low Asset (LILA) scheme and the Debt Arrangement Scheme (DAS) should be made fully accessible to debtors who are stuck in a cycle of debt and that the £100 fee for accessing the LILA route into bankruptcy should be abolished as only one in five clients said they could unconditionally afford it; further believes that more affordable mainstream credit should be made available to low-income groups; commends the work of the Citizens Advice Bureau in Dumbarton and bureaux across Scotland in providing free, impartial and confidential frontline advice to all who need it, and would welcome the provision of sustained funding for agencies such as Citizens Advice in order to address the growing demand for such advice.
I am pleased that so many members have chosen to stay in the Parliament when there are other attractions in Glasgow as we speak.
I congratulate Citizens Advice Scotland on its report "Drowning in Debt" which was launched this morning. I am sure that members of all parties agree that CAS plays a vital role in helping us to shape social policy. Its influence on that agenda is in no small part due to its ability to translate the experiences of the people who come through the doors of citizens advice bureaux in communities throughout Scotland into changes and innovations in policy. I thank CAS and all bureaux in Scotland for their work.
Let us consider the substance of the report and some of the headline information. Debt among citizens advice bureau clients has increased by a staggering 50 per cent since 2003. Average total debt stands at £20,193. What the motion says bears repeating: four in 10 clients have gone without essentials to try to cope with their debt; one in four clients has borrowed further credit to pay existing debt; two fifths of debt clients reported being pressured or harassed by creditors; two thirds of debt clients said that they would consider going bankrupt to manage their debt. There is no doubt in my mind that the current financial climate is also having an impact.
We know from previous reports that CAB debt clients in Scotland have a lower income than people in other parts of the United Kingdom and that their income is below the Scottish average. It is undoubtedly more of a challenge to service a debt if income is low. Debt disproportionately affects lone parents, older people, the disabled and long-term sick, as well as those on low incomes.
We know that relationship breakdown is a significant feature among debt clients; it has the attendant problems of a drop in income, increased responsibility for bills and the need to balance the pressures of care and work that we know too well. It will come as no surprise to many members that children cost money too, but the financial consequences go beyond providing for the child. Parents might end up with more limited work options, perhaps through working part time, and they might have to pay for child care and much more besides. That all combines to lower income and, potentially, to raise debt—and it is all much more acute for lone parents.
The report shows that one third of the survey participants had an illness, impairment or other health problem. Some had a mental illness, others a learning disability. It also shows that their incomes were generally lower, which underlines the fact that debt has a disproportionate effect on the most vulnerable people in society.
We can just about begin to imagine the impact that debt has on households with low incomes: they struggle to make ends meet, are unable to make payments to service their debts and get into a spiral of despair. The stress and depression that that causes is all too evident. The report tells us that a client with a monthly income of less than £400 owes an average of £52 for every £1 of income. It is little wonder that they are stressed when they have to choose between essentials such as putting food on the table for the family and paying off significant debts.
I will say a word about creditor behaviour. Twice as many clients have been threatened with informal debt recovery action—not formal, open and transparent action through the courts. The informal action is under the radar and unpleasant. I have had constituents who were hounded at their homes and work, not just by letter—bad enough though that might be—but by telephone and yes, even personal visits. The level of aggression and harassment is unacceptable. We must recognise that the overwhelming majority of people do not choose to get into debt; they would quite like to pay it off and balance their accounts better. The level of harassment of people when they have nothing is entirely unacceptable.
I endorse everything that the member has said. Does she also appreciate that there are organisations that are now preying on vulnerable people by asking them to sell their home for rent back? I understand from constituents that that is a shocking development. Will she commend the Office of Fair Trading, which will announce new guidelines on toughening up that area?
I absolutely agree, and associate myself with the member's remarks.
We had a huge briefing that described the varying impacts on different groups of people who find themselves in debt—young, old, lone parents, those on lower incomes—and I will leave it to other members to develop those points; I will spend my remaining time talking about my local CAB in Dumbarton and what I believe should be the forward agenda for the Scottish Parliament and, yes, the Scottish Government—I am delighted to see that the minister is in a good mood with us this evening.
Dumbarton CAB dealt with £713,000 of debt last year. That is a significant figure, but it tells me that, this year, the number of debt cases has increased by a staggering 70 per cent—and we still have a quarter of the year to get through. That leads me to my first suggestion to the Government: it should increase support for debt advice services, and resources should be targeted at areas that experience the most disadvantage. With something like a 70 per cent increase in Dumbarton alone, never mind throughout the country, that is essential if we are to provide people with quality advice.
Last year's Scottish budget contained additional funding of some £1 million due to decisions that the UK Government made. It would be extremely helpful if that was continued, especially as the need is getting greater.
The low income, low asset scheme—LILA—and the debt arrangement scheme also need to be much more accessible. I strongly believe that the £100 fee to access LILA should be abolished. It is plain daft to expect that people with multiple debts who are struggling to cope will pay a £100 entry fee to the scheme. I know that the minister will consider that proposal carefully. He should be aware of the overwhelming support that there would be for such a move.
There are also recommendations for the UK Government on tighter regulation of creditor behaviour, inappropriate access to credit, improved protection against creditor harassment and ensuring that mainstream credit is affordable, which includes considering the social funds. CAS will raise those issues with our colleagues at Westminster and I am sure that it will get a positive hearing.
I commend Citizens Advice Scotland's report to the Parliament. There is much that we can learn from it and I hope that the minister will be positive about many of the recommendations that emerge from it.
I congratulate Jackie Baillie on securing the debate and recognise her continued commitment to tackling poverty, social deprivation and debt since she entered Parliament. I should also declare an interest as a member of the board of Central Borders Citizens Advice Bureau and, although it is some years since I was in legal practice, I was on the duty roster for several years during that period as visiting solicitor at Portobello CAB. Therefore, I have a degree of coalface experience, although it is perhaps a little out of date.
Debt problems—whether they arise through job loss, marital breakdown, poor wages, foolish spendthrift ways or ill health—have always been high on the list of client problems in the CABx, as is evidenced by the substantial report that Jackie Baillie mentioned. To state the obvious, the recession can only have made matters worse. Of course, the poorer somebody is, the less they can afford credit but the more they need it. Although I recognise the attractions of bankruptcy, it should not be entered into lightly, as there are repercussions for many years, even after discharge.
I thank CAS for its helpful briefing pack and, in particular, for drawing attention to the following statistics. One that I did not expect is that older people have the highest levels of debt of all age groups, owing an average of £26,000. The levels of debt in that group have increased by 50 per cent in the past two years. We are talking, of course, about multiple debts.
As Jackie Baillie said, creditors are becoming more forceful and taking less account of whether the debtor can afford to pay—not infrequently when the debtor has been seduced into accepting credit arrangements that were completely unaffordable from the start.
I mention in passing, as I have before, the hazards of enticing advertisements for consolidating debts. As the old saw says, if it is too good to be true, it is too good to be true. Unfortunately, these days we start from the premise that debt is natural—it is okay. Gone are the days when my mum condemned anyone for buying on tick. From cradle to grave, many of us are in debt to someone at some time—from the moment when the lone parent has to borrow to buy a buggy, perhaps even to the cost of cremation.
The chill wind of recession is not only personal but national. Our banks are bust but we cannot let them, unlike ordinary debtors, go to the wall. Piled on to our own debt is the £16,700 that each of us has loaned to the banks. It is grim indeed. I understand that, if somebody on average earnings owed the same amount, it would take them 28.5 million years to pay it off. The lower somebody comes down the income pecking order, the less room they have for manoeuvre and the more their borrowing is not for the nice things but the necessary.
What can we do within the Parliament's limited capacity? I say again that we need a far greater push to publicise credit unions. Just the other day, I had a constituent in my office who was up to his ears in money problems and borrowing at eye-watering interest rates. He had never heard of credit unions. I have now put him in touch with Capital Credit Union, but there is no branch in the Borders. It is unfortunate that there are few in Scotland.
Some of the banks that are floating on our money should recycle any bonuses not to directors but to our schools and youth groups so that financial education is given the profile that it needs. Perhaps some of their directors should have attended such classes themselves.
I congratulate citizens advice bureaux, whether in the central Borders or anywhere else, on the very important work that they do and on remaining dedicated and creative in accessing funding. Even in these straitened times—perhaps more so now—I hope that the minister will look at the funding issue in local authorities and elsewhere and keep a careful watch on it, because timeous, informed intervention for an individual can save them a great deal of cost in terms of grief in their life and, indeed, a great deal of subsequent cost to society.
Like other members, I welcome tonight's debate, which was initiated by Jackie Baillie at the end of what I suspect has been a long day for her. I admire her stamina in kicking off this morning on the vexed subject of hospital-acquired infections and concluding our day's deliberations by leading this discussion on another serious and important topic affecting people in Scotland, namely the rising tide of personal debt. I, too, thank Citizens Advice Scotland for the excellent debt briefings that have been prepared for members on a general and constituency basis to highlight the work of CABx across our country.
In the first session of Parliament, we had to deal with the controversial issue of poindings and warrant sales as a method of recovering debts and work out a humane alternative to that process that was fair to both debtors and creditors. I stress fairness to creditors not because of any great love for banks or finance houses but out of a recognition that the availability of credit drives the engine of our economy. It is essential that personal credit remains available to people in lower-income groups to assist them in managing their lives. If we do not have a fair balance, the sources of such credit will dry up, and the poorest in our society will suffer most as a consequence.
I had the pleasure of serving on the all-party expert working group that was established by the then Scottish Executive to come up with the proposals that were set out in our report "Striking the Balance: a new approach to debt management", which was published in July 2001. Those proposals led to the enactment by Parliament of a statutory debt arrangement scheme, the new diligence of attachment to replace poindings and warrant sales, and the expansion of money advice services and Government funding support for them through the Scottish Executive as well as Her Majesty's Government.
That was my parliamentary introduction to debt issues, but it has not stopped there, because I am a member of the Parliament's Local Government and Communities Committee, which is considering the Home Owner and Debtor Protection (Scotland) Bill. The bill focuses on the issue of home repossessions by creditors and the law relating to sequestration and voluntary trust deeds and the sale or disposal of a family home in those contexts. Parliament as a whole will be able to debate those issues later this year at stage 1, so I will not prejudge the committee's conclusions. Suffice it to say that, in my parliamentary experience, just as the poor are always with us, so is the subject of debt.
Citizens advice bureaux provide an important money advice service to constituents who get into financial difficulties. I commend the work of the many professional staff and the many hundreds of people who give voluntarily of their skills to assist clients in resolving those problems. Of course, as MSPs, we are no strangers to debt problems: witness the number of people who come to our surgeries with financial difficulties, as Jackie Baillie recounted. However, what I find striking in my experience is that those financial difficulties arise not so much from debts that are thrown up on credit cards, mortgages or personal loans, as from debts and liabilities that are incurred as a result of overpayments of tax credits that are assessed through the tax credit office or errors in child support assessments or entitlements to housing benefit and council tax benefit.
It is my experience, which I am sure is shared by other members, that the intervention of an MP or MSP gets results for the constituent. Our intervention elevates the case to a complaint section that is usually staffed by a more senior official who is tasked with responding to the member on a fast-track, VIP basis.
From a member's standpoint, that is gratifying, particularly if it can help to root out an error that has been entrenched in the system and lead to the reduction or elimination of a liability that has been causing a constituent a great deal of stress. However, in many cases, we simply need a clear explanation about why a particular liability arises. Often, such an explanation has been sought in vain by the constituent over many months, when confronted with computer-generated letter after letter that bear no obvious relationship to one another and in which the calculations and assessments are often difficult to follow.
That is why we can do a great deal to assist Citizens Advice Scotland and its bureaux not just by funding and supporting their work but by reducing their workload—and our own—through raising standards of customer service and customer care in the public bodies, agencies and councils for which we have responsibility. The standards of service that we as members receive when acting on behalf of constituents should be the standards of service that constituents receive in the first place. Achieving that would be a great step forward.
I add my congratulations to Jackie Baillie on her motion and on securing this evening's debate. I also congratulate Citizens Advice Scotland on its very detailed "Drowning in Debt" report.
The debate provides a welcome and timely opportunity to highlight the tremendous work that citizens advice bureaux do in every constituency and region throughout the country. It is also a chance to acknowledge the extent to which the bureaux are a victim both of their own success—with many more word-of-mouth referrals—and of the difficult economic circumstances in which we all currently find ourselves.
Earlier this week, I visited my local citizens advice bureau in Kirkwall. I try to visit regularly, although I am conscious of the need to avoid making a nuisance of myself, given the bureau's large and increasing workload. I consider myself very fortunate in my relationship with the local CAB team. In keeping with the rest of the CAB network, the depth and breadth of the expertise on hand in the Kirkwall bureau is highly impressive. The team have certainly helped me in my work, but a more important point is that they have helped many of my constituents who are struggling to deal with a wide range of debt issues for the reasons that David McLetchie mentioned.
More often than not, those who present to the CAB are, as other members have said, the most vulnerable people in our communities. They include young people, the sick, those with disabilities and, of course, older people. Help the Aged and Age Concern have highlighted the specific problems that face older people, who are—as Christine Grahame said—saddled with the highest average debt but stuck on low, fixed incomes with limited means of raising extra money to pay back their debts.
As this week's report lays bare, debt is increasingly what prompts people to seek help from their CAB. The Citizens Advice Scotland briefing on the workload of the Orkney CAB is extremely disturbing, but I have no doubt that it faithfully reflects the breakdowns that have been provided to members across the country. In the case of Orkney, the average debt level is around £19,500. When one considers that, like many parts of the Highlands and Islands, Orkney suffers less from unemployment than from underemployment and low wages, it is clear that the risks are not just to those who are unfortunate enough to have been laid off.
Another striking feature of the picture that has been painted—this seems to apply nationwide—is the complex nature of people's debt problems, which often involve multiple creditors and the threat of repossession. That puts added pressure on CAB staff, who must then spend much more time trying to disentangle the web of debt that has been built up. With growing numbers of people approaching the CAB for help, that extra time is not easy to free up.
In the case of the Kirkwall CAB, if not in all bureaux, the problems of space—in particular, the availability of discreet meeting room facilities—is also a serious and worsening problem. Orkney Islands Council is to be congratulated on its efforts to work with Voluntary Action Orkney to identify more suitable premises for the CAB and the other third sector bodies that do so much to underpin public service delivery in the islands. However, the truth is that a solution cannot come soon enough, given the pressure on CAB staff and volunteers.
Although it might seem perverse to argue for more CAB staff given what I have just said about space constraints, I echo the comments that others have made about the valuable contribution that has been made by the credit crunch funding. In the Kirkwall office, that funding has allowed an administrative assistant to be taken on, thereby freeing up the more experienced staff to deal with the increased caseload and more complex cases. Given that there will be a lag as we come out of the recession, I agree with others that that pipeline of support should not be simply shut off next March.
The complexity of the cases is an inevitable consequence of the way in which many people have sought to manage their debt problems. What is not inevitable and what is absolutely unacceptable, as Jackie Baillie and Jeremy Purvis made clear, is the way in which some creditors choose to pursue those debts. Aggressive and repeated harassment of people who are already under extreme stress is a tactic that is far too often deployed. Some constituents of mine have been encouraged to pay back debt by loading it on to their credit cards. Such harassment simply cannot be allowed to continue, and there appears to be a case for looking again at regulation in that area.
Similarly, attention needs to be paid to the way in which mortgage-to-rent schemes operate. They offer people scope to manage their way out of serious debt problems and, importantly, keep them in their homes. However, the process can be time consuming and bureaucratic and the information that is gathered is often out of date by the time that it is collated, which forces debt advisers to go back to square one, with the consequence that further debt is incurred. I hope that the minister will agree to consider that matter.
It would also be helpful if the minister would agree to consider the threshold values for eligible properties under the mortgage-to-rent scheme. I understand that they can be set at unrealistic levels, with the result that entire areas are effectively excluded from the scheme.
I am grateful to Jackie Baillie for allowing me the chance to put on the parliamentary record my appreciation of the work that Geraldine Ferguson, her staff and the volunteers do on behalf of many of my constituents. That recognition is long overdue. I hope that the views that are expressed across the chamber this evening ensure that this essential service continues to enjoy the support that it needs to meet the increased demands that are placed on it during these challenging times.
Like my colleagues, I congratulate Jackie Baillie on the timely and important debate that she has secured. I also want to add my thanks to Citizens Advice Scotland for the hard work that it has done to do research and produce policy briefings not only for today's debate but consistently over the years. It has ensured that we are informed not only about the national picture but, crucially, about the local constituency issues and about what is actually happening in our communities.
The choice of words for the title of the report—"Drowning in Debt"—is good, as that phrase sums up the helplessness, the despair and the sense of going under in a sea of debt that people in that circumstance must feel.
The services that the CAB network provides are absolutely vital. From a visit to my local CAB office in Gorgie-Dalry, I know that the number of people seeking help is substantially up on last year. I record my thanks to the volunteers and staff for keeping that service going, even though they are under pressure. Although I do not want to exaggerate the situation, it is clear that the combination of recession and the steady loss of jobs in the financial and banking sector in Edinburgh is taking a severe toll on many households. The number of job vacancies is half what it was this time last year. We know that the unemployment rate is going up, as well.
Clearly, many people are struggling to keep their heads above water. Statistics show that the key vulnerable groups are those who are already on low incomes, for whatever reason. Those people simply do not have savings to fall back on to get them through hard times. People who are in negative equity are now not able to sell their house, settle their debts and move to the rented sector. That choice is simply no longer available to them. It is a deeply worrying time. Jackie Baillie's motion is extremely well written and she spoke eloquently to it. I agree with her that it is vital that people who are already in debt are not ruled out of receiving financial assistance on the ground of a lack of money. To a lot of people, £100 does not sound like a huge amount of money, but to someone who is already in debt, £100 could be a completely insurmountable barrier. I hope that we can add our weight to that of those who are lobbying to change that situation.
As I have said, by the time that people seek help, they are highly likely to have already exhausted their funds and any help from family. It is human nature to try to survive. However, for some people, it has become impossible to cope. We need to work together to try to ensure that our CAB network is robust, properly funded and capable of helping people to the level that they need.
In Edinburgh, people who are in debt are likely to have five debts each. They are also likely to have more debts than the Scottish average, and those debts are likely to be complex and require face-to-face support from money advisers on, most likely, more than one visit to a CAB. Those tough cases take up a disproportionate amount of time.
I have written to ministers—not Alex Neil, but his predecessors—to urge them to provide more support for people who are in financial crisis. I know from my experience over the years that when we have lobbied the Scottish Executive, the Scottish Government and the United Kingdom Government, amounts of money have been provided, and last year's credit crunch money was hugely welcome.
However, I sound a note of caution. The debt money that was allocated to Scotland last year was—although welcome—distributed in such a way that it disadvantaged the CAB network in Edinburgh. A couple of years ago, the Edinburgh network was pulled together, and the five offices were united as one organisation. That has ruled them out of being able to apply as individual CAB offices for grants and bursaries, and—crucially—for the credit crunch money. The city's network therefore received an allocation that in other parts of the country would have gone to only one bureau, whereas it had to cover five bureaux in Edinburgh.
I met representatives from the CAB network in Scotland last year, and I made representations to ministers. I understand the variety of pressures that were placed on what was—although significant—not a huge amount of money. If more money comes to us this year, which I would strongly welcome, I urge the minister to examine the distribution formula and to add his weight to that of those who are seeking a fairer distribution method, to ensure that Edinburgh does not lose out in the way that it did last year.
In a recession, I can think of no organisation that needs and deserves support more than Citizens Advice Scotland. It deserves not only the amount of support that it has received in the past, but the greater support that it will need to provide the increased services that are required at such a time. I congratulate Jackie Baillie on bringing the debate to Parliament, and I echo Sarah Boyack's call for greater support for citizens advice bureaux.
We can borrow money at single-figure interest rates, but the poorest people in our society borrow money at exorbitant interest rates, which are quite legally applied—they can borrow £100 at an interest rate of 250 per cent. The good side is that they get a guarantee that there will be no increase in the interest and that they have a reasonably long fixed period in which to repay the money. They sign a document to say that they will pay £250 for the £100 that they have borrowed. It is absolutely disgusting, and we should not allow that type of loan to be offered. We also still need to do more to pursue loan sharks for their illegal operations.
Age Concern Scotland and Help the Aged in Scotland have issued a detailed and helpful briefing on the subject, and I hope that members will forgive me if I read one bit of it verbatim. The briefing states:
"Debt among older people can be tackled in a number of ways. We welcome the range of recommendations made in the Drowning in Debt report, particularly in terms of curbing aggressive lending tactics and ensuring that lenders adhere to strict standards of responsible lending. As the recession has demonstrated, this is as much in the interest of lenders as individuals looking to borrow money."
Tak tent, major banks in America.
The briefing goes on:
"Financial advice and education from an early age is also important in creating a culture of responsible borrowing and is essential in helping people struggling with debt",
and that
"For older people in particular there should be an emphasis on maximising incomes, which for most pensioners means ensuring that they are claiming all the benefits to which they are entitled. If all eligible pensioners were receiving Pension Credit, no pensioner in the UK would have to live on less than £130 a week, considerably more than many pensioners survive on today. This is still substantially below 60% of the UK median weekly income of £236".
The briefing continues by stating that
"With as many as 41% of eligible pensioners not claiming Pension Credit, as many as 45% not claiming Council Tax Benefit and up to 18% not claiming Housing Benefit across the UK, the beneficial effect that automatic benefit payment would have on pensioners' finances is significant. We would like to see the UK Government introduce a scheme whereby benefits such as Pension Credit and Housing and Council Tax Benefits are paid to pensioners automatically. The Department for Work and Pensions and HMRC departments already hold the information required to process these benefits automatically—all that is required is the political will."
Members of the major political parties, as they like to call themselves, should be lobbying their colleagues at Westminster on the issue, because it is such a no-brainer. It is obvious that providing pensioners with information and encouraging them to do the simple act of claiming what they are entitled to will help an awful lot.
I join everyone else in congratulating Jackie Baillie on securing this evening's debate and on her excellent introduction to it. As Christine Grahame and others have done, I acknowledge Jackie Baillie's long-term commitment to helping people who are in poverty and other vulnerable members of our society.
As the Minister for Housing and Communities, I also pay particular tribute to the citizens advice bureaux throughout Scotland and the overarching body Citizens Advice Scotland. Many professional people work for and provide professional advice through citizens advice bureaux, but we should also acknowledge the volunteers who work in bureaux the length and breadth of Scotland. Their commitment is to be commended.
The debate has been helpful. There is no dispute in the chamber about the fact that debt is an increasingly significant social problem in Scotland. The information that is provided by Citizens Advice Scotland in its various reports is extremely helpful. As Liam McArthur pointed out, the data that are available are not comprehensive, so I am glad to say that the Office for National Statistics will later this year publish the results of a wealth and assets survey, which should help to show the causes and incidence of debt problems in our society as part of that wider survey.
I want to address in my reply some of the issues that have been raised during the debate—particularly, but not exclusively, those that were raised by Jackie Baillie. I will try to be as helpful as possible. An on-going joint review by the Convention of Scottish Local Authorities and the Scottish Government is examining the range of welfare advisory services that are available in Scotland and we anticipate that the group's report will be published before Christmas. We hope that it will inform the debate on how we can improve the range of advice, and its delivery, throughout Scotland. That relates not just to Citizens Advice Scotland but to Money Advice Scotland, local authorities and many other organisations.
I want to say a few words about the support that we provide. We core fund Citizens Advice Direct, which I visited last summer and which provides a helpful service in support of the wider work. We part fund the National Debtline, and we have provided Citizens Advice Scotland with an additional £1.1 million to increase the availability of advice in response to pressures that the recession is putting on our citizens and advice agencies. That money has been allocated across Scotland and has increased the overall capacity to provide general advice, but it has also helped us to provide some specialist support, particularly on issues such as potential repossession and debt that is associated with home ownership.
That money has indeed been welcome and it has been used productively. Because everybody is seeing that increasing demand coming at them, we are desperate to know whether that funding will continue in the next financial year.
We will be in a position to make final decisions on that once we see the pre-budget report on 9 December, which I hope will confirm our overall budgetary position for next year. I assure Jackie Baillie that Fergus Ewing and I, as the two ministers who are primarily responsible, will do everything we can to ensure that the resources are put in place, as far as possible, to cater for the increased demand, because we recognise the importance of that, as we told the Local Government and Communities Committee yesterday.
If I may say so, it is better to invest in front-line, up-front rehabilitation services to help people before they get into too much debt or have to apply for bankruptcy, sequestration or whatever. I totally agree with Jackie Baillie's point.
I hope that our consultation on improving access to the debt arrangement scheme, which will close on 18 December, will come up with some interesting recommendations. The Accountant in Bankruptcy's review of the scheme, which includes the operation of LILA, will also help to inform policy. It would be extremely helpful if, as part of those reviews, people could present evidence on issues such as the £100 barrier; after all, the purpose of the reviews is to find out what further action needs to be taken. Moreover, the Government bases its policies on evidence and we will certainly examine and respond to any evidence that is submitted.
As some debtors are still unable to access debt relief, we have accepted the debt action forum's recommendations, including proposals for a new route into bankruptcy—the certificate of sequestration. The measure is included in the Home Owner and Debtor Protection (Scotland) Bill, which is currently being considered by Mr McLetchie and his colleagues.
Is the minister going to say something about credit unions, which are so often overlooked? I would certainly like to hear what he has to say.
As I was about to say, credit unions play a vital role in helping people not only to manage their finances but to avoid getting into debt in the first place. It is much better for people, particularly people on low incomes, to borrow money from a credit union than from characters such as those to whom Robin Harper referred. I am glad to say that, in his time as the Cabinet Secretary for Finance and Sustainable Growth, my colleague John Swinney has very much supported credit unions. Of course, some of them will be able to access the additional funding for third-sector organisations that has been made available this year and which has already been set out in the draft budget for next year.
Although, all in all, an awful lot of work is going on, much more can be done. For example, councils could intervene much earlier with people who are getting into difficulties with rent and council tax arrears. Instead of simply waiting and then having to set sheriff officers on such people, some local authorities could learn lessons from the rehabilitation practices of some of the major banks, which in recent years have made great advances in this area. Now, if people get into arrears with their mortgages over two or three months, the banks are intervening with appropriate advice and general support to stop them getting into further debt.
I had much more to say but, as always, I have run out of time. I have listened—and will listen—to what members have to say and will pass on to my relevant ministerial colleagues the points that have been made in tonight's debate. Whatever additional action is required to tackle the problem, we are certainly prepared to take it.
Meeting closed at 17:43.