Commissioning debt advice that is accessible to people with mental health problems

Debt advice is a lifeline to thousands of people each year. Yet demand for the service has long outstripped supply. Over the past two years HM Treasury and the Money and Pensions Service (MaPS) have embarked on a huge recommissioning process, allocating £38 million increased funding and redesigning service provision to meet the growing demand for advice. 

Increasing the number of people who can benefit from debt advice is welcome news, yet there is more to commissioning debt advice than increases in funding. With nearly half of people in problem debt experiencing a mental health problem it is crucial that MaPS recommissions debt advice services that are accessible to people with mental health problems. To do that, any new commissioning model needs to strike the right balance between serving greater quantities of clients while also achieving quality of advice for increasingly complex cases.

While the debt advice sector has universally welcomed increased funding, previous – albeit abandoned plans – to cut funding for face-to-face advice meant concerns remained about how MaPS would allocate funding between remote delivery, such as telephone and online, and regional delivery such as face-to-face provision. 

Against this backdrop, we were keen to hear two substantial announcements made by MaPS over the past week about the future of debt advice in England. Last week, they announced grants totalling £30 million had been offered to existing community-based debt advice services, running until April 2025. And yesterday, they set out plans for awarding contracts to three national debt advice providers. Through these new contracts, MaPS have forecast an increase in the number of people receiving remote debt advice services from 240,000 per year currently, to 650,000 people by 2026. 

The channel through which debt advice is delivered can make a huge difference to a person’s outcomes. Many people with mental health problems find particular forms of communication difficult or impossible to manage. Some people, including those who are digitally excluded, can find online debt advice impossible to access. For others, using the telephone can be a deeply distressing experience, and many people with mental health problems find the complexity of their circumstances and their communication needs mean that face-to-face debt advice is crucial. 

The complicated recommissioning process meant the exact channels through which national services intended to deliver advice were dependent upon individual bidders’ proposals. There is significant experience and expertise in both remote and face-to-face delivery among those awarded the contracts yesterday. But it is still unclear to what extent the funding to the three national contracts is predominantly reserved for remote delivery and how much, if any, funding will go to face-to-face delivery. Providers bidding for national contracts will have faced difficult trade-offs to give themselves the best chance of being successful in winning one of the three contracts. With a focus on serving more clients, it is crucial that this hasn’t been at the expense of serving those with more complex needs, including mental health problems, who may require more tailored support. 

As the cost of living crisis takes hold, the demand for debt advice is likely to soar. More people arrive at debt advice with deficit budgets, and the impact on people’s mental health continues to mount. All this equates to greater case complexity, requiring a more tailored approach to debt advice and significantly more time. 

MaPS and those awarded contracts face a significant challenge. Increasing the numbers of clients served by nearly three times, with less than double the funding increase. We’ll be keeping a watchful eye over the next three years, to see how this model pans out in practice to ensure that the needs of people with mental health problems can be met in this new model of delivery. Balancing these competing priorities is a huge challenge, but one which cannot be overlooked. 

If you need direct help with your finances, there are a variety of free-to-use advice and support services with many advisers trained to help those with mental health problems – click here for more information.