Labour pours cash into debt reduction strategy

The government last week opened new premises for National Debtline and revealed plans for a 45m free debt advice service.

National Debtline helps 60,000 people a year find a way out of debt. It’s now moving to bigger premises after taking on 19 new staff, bringing the total number of full-time telephone debt advisers to 64, all based at the new centre at Tricorn House in Birmingham.

The expansion is part of the government’s strategy to tackle over-indebtedness.

Consumer minister Gerry Sutcliffe says: “We have greatly increased our funding for National Debtline to 1.5m this year, 1.8m in 2006/07 and 2m in 2007/08. The finance community is contributing a similar amount over the same period.

“As well as helping fund new premises, this money has enabled National Debtline to recruit and train more advisers.”

He adds the government is asking charities and other non-profit organisations to bid for a share of a 45m fund for a huge expansion in free, face-to-face debt advice in England and Wales.

The money, made available as part of the Treasury’s Financial Inclusion Fund, will help recruit and train hundreds of debt advisers to help people find ways of getting their debts back under control.

The money will be targeted at areas and social groups in England and Wales with high levels of financial exclusion. Funding priority will be given to organisations with experience of providing debt advice services.

Sutcliffe adds: “While many people looking for a way out of debt can be helped over the phone, others find it crucial to have face-to-face advice which is why the government is funding both types of support.

“Excessive debt can cause misery to families which is why the government is committed to tackling over-indebtedness.”

The move has been well received by lenders. Matt Grayson, a spokesperson for BM Solutions, says: “National Debtline is a great charity and government support in this particular area is useful in finding solutions to deal with the impact of debt on consumers.

“More money invested in improving financial literacy to prevent people getting into debt in the first place would be also be welcome. But there are those who get into difficulties through no fault of their own so helplines are always going to have an important role to play.”