The middle of the line

I noticed this story on the local Observer website this week: High demand for debt help about a Rugby-based Christian charity that are reporting a large increase in people coming to them for help on debt. The recession has hit people hard, and the programme of spending cuts (which means job cuts) and the recent increase in VAT are combining to squeeze people who are already struggling.

So it is great that there are organisations out there to help.

However, since I saw that story, two more things have come to light that will make it much harder for people in debt to get help. Firstly, the Tory-led government has axed funding for debt advice. The Financial Inclusion Fund cost £130million. But in the last 5 years it has helped:

• 379,000 people manage more than £6bn of debt.

• 3,000 families stay in their homes, resulting in a £150m saving to the courts and mortgage lenders in court and repossession costs.

• create an estimated £700m in annual cost savings for the NHS because of avoided mental health problems and stress.

• creditors recover an estimated £300m more of their debt than they would have recovered without the service.

Secondly, reports are coming in from across the country that local Citizens Advice Bureaux are facing possible closure, such as in Birmingham, due to local councils hacking away at grants to local voluntary groups as they try to deal with the effects of Eric Pickles’ 28% reduction in funding. CABs spend much of their time dealing with people who have debt problems. As much as they have been trying to diversify their funding so they are not wholly dependent on council grants, now is really not the time to pull the rug.

As much as the Tories in Westminster talk about the ‘Big Society’, they are undermining the voluntary sector with their deep and early cuts and trying to pass the blame down to local councils. When it comes to dealing with debt, it’s important to ensure that people have access to advice and support, because very often a little help can go a long way to avoiding bankruptcy and homelessness.

No wonder that Phil Redmond has become disillusioned with the ‘Big Society’ project. Projects like Rugby’s CAP are going to have to pick up all the of slack when the cuts hit other agencies. I just hope that they can cope. Because the real losers will be those who are already suffering from debt problems.