Funders report Q3 July - September 2012

October 2012
Money Advice Trust Registered Charity Number 1099506 A company limited by guarantee. Registered in England and Wales Number 4741583

Contents

MAT update Funding Innovation Grants

Growing capacity to assist clients National Debtline My Money Steps Business Debtline Achieving high quality advice Adviser Support Specialist Support England and Wales Research, Policy and Information CASHflow Common Financial Statement Research Sustainable repayment arrangements Policy and consultation responses Appendices App.1 Funding status Jan Dec 2012 App. 2 National Debtline figures App. 3 Business Debtline figures App. 4 Funders App. 5 MAT Partnership Board members and MAT contacts

6 7 8 9 10

1)

MAT update

Case for Support MATs Case for Support 2013 has been sent out to all of MATs current funders along with contacts in prospective new sectors. Unusually the Case for Support is only a one year proposal. The debt advice landscape is currently in a state of flux as the Money Advice Service commences its role in co-ordinating debt advice; we have assured funders and potential funders that we will be presenting them with a three year funding case in the summer of 2013. MAT will continue to widen the net of funders and this year there will be a particular focus on utility companies, payday lenders and catalogue companies. MATs funding model has identified these three sectors as ones which drive a significant amount of traffic to advice services but which at present do not contribute to MAT at the amounts suggested in the funding model. Alongside the Case for Support, MAT has created a set of funding principles to ensure that both MAT and its funders are clear on what the relationship means and that by accepting funding MAT is not endorsing the practices of any organisation. The Case for Support sets out MATs aims for next year, its funding requirement for 2013 and the business case for support. For 2013 MAT will be focusing its work on providing advice and supporting advisers and will leave the Money Advice Service to carry out its co-ordination role. Innovation Grants Programme MATs Board has awarded eight innovation grants for 2013. 383 first round applications were received of which 45 were shortlisted. 38 eligible second round applications were received. MATs Grants Committee with assistance from Dion Alday from Nationwide and Garry Hunter from FOS reviewed the applications on the 28th September and agreed on eight projects which were recommended to MATs Board for approval. These projects were in turn approved by the Board. There was a real shift this year in the types of projects that were requesting funding with an increase in projects relating to housing and the impact of welfare reform. The projects which will be funded next year will be really useful in helping MAT to identify ways to help advice providers deal with the upcoming changes to benefits. The organisations awarded a grant for 2013 are below and full details of the projects will be included in the Q4 report when the grants have been officially launched. Age UK Camden Act Now (a project with older private tenants) Calderdale CAB Troubled families support project Liverpool Central CAB Signed money management Oxford CAB Tackling threatened homelessness in Oxford Rochdale CAB Home rescue money advice project Stroud CAB Business debt advice project Toynbee Hall Tenancy Talk: supporting private tenants through change Vi-ability Kick for cash (a project using football to teach financial capability) Party Conferences MAT partnered with the UK Cards Association to host fringe events at each of the Autumn Party Conferences. Entitled Bang on the Money: A New Model for Early Intervention and, using MATs earlier research into early creditor intervention1, the events looked at ways in which government, charities and the private sector can work together. The speakers included Norman Lamb MP, former Minister for Consumer Affairs (Liberal Democrat); Ian Murray MP, Shadow Minister for Consumer Affairs (Labour) and Justin Tomlinson MP, Chair of the APPG for Financial Education. Citizens Advice Pilot At the end of Q2, MAT and Citizens Advice launched a pilot to help meet some of the unmet demand from Citizens Advice helpline. Clients who contact this helpline and who are identified as needing debt help are transferred to NDL. The pilot is going well and is currently generating an additional 4,000 calls per month of which NDL has been able to answer around 3,000.

Understanding financial difficulties: Exploring the opportunities for early intervention, 2011

2) Growing capacity to assist clients National Debtline (NDL) In Q3 2012, NDL helped 34,046 clients. This is an increase of 15% (5114 clients) on Q2 and is a result of the pilot which is running with Citizens Advice. The trend for clients contacting the service with lower debt levels has continued with 34% of clients reporting debts of less than 5,000, in 2010 only 22% of clients had debts of this amount. For the first time in this report we have included data on the percentage of clients who are contacting NDL with debt relating to payday loans. In 2011 the numbers were so low that they were not showing as significant. In Q1 2012 this jumped to 9% of clients and in Q2 and Q3 11% of clients. This is equal to those who are contacting the service about debts relating to water, rents or telephone. With the support of Barclaycard, whose experts have volunteered their time, analysis is underway of NDL client CFS statistical data. This work will give an insight into the household compositions of NDL clients, and the influences of income, expenditure, trigger figures and surplus income levels. The findings will be shared when this work is complete.
25% 20% 15% 10% 5% 0% 2008 2009 2010 2011 Q12012 Q22012
Fuel debt Pay day loans Water

Most reported debt types1

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Unsecured debt owed

Q32012

2010

2011

Q1 '12 Q2 '12 Q3 '12

50,000 - 100,000 15,000 - 25,000 1 - 5,000

Catalogues Hire Purchase Conditional Sale Rent

Council Tax Mortgages Telephone

100,000 + 25,000 - 50,000 5,000 - 15,000 None

1 Excluding bank / building society loans and overdraft and credit cards

My Money Steps (MMS) Q3 2012 saw the strongest months for new registrations and advice sessions. At the end of Q3 MMS had provided 27,729 advice sessions. Updates have been made to MMS with a new my debts section. This new format makes entering debt types easier and means MMS can provide advice on a greater number of debt types including parking and congestion charges, debts to family and friends and payday loans. A link to MMS is now available on Citizens Advices Advice Guide and work is underway ensure this used to maximum impact. Business Debtline (BDL) In Q3 2012, BDL helped 6,253 clients which are similar to the numbers helped in the same period last year. BDL has been working with Energy UK to review the micro-business section of the Energy UK website and continues to try and widen its funder base.
100% 80% 60% 40% 20% 0% 2010
Agriculture/Forestry/Fishing Manufacturing Services NotKnown

Businessclassification

100% 80% 60% 40% 20%

Amountowed

2011
Construction Mining Transportation

Q1Q32012
Financeinsurance/realestate Retail Wholesale

0% Nodebtowed 30k50k 2010 >5k 50k100K 2011 5k15k <100k Q1Q32012 15k30k Notknown

3) Achieving high quality advice Adviser Support In Q3 2012, MAT provided 990 training places, including 918 free wiseradviser places for money advisers within MATs partnership. In Q3, A Blended Approach to Money Advice was launched. This e-learning module was funded by the Money Advice Service and is available to advisers in England and Wales registered on wiseradviser. The module provides advisers with an overview of the different channels and interventions currently available for debt advice (telephone, face-to-face, assisted self-help, etc.), the situations in which each may be appropriate and ideas as to how they may be blended. Starting in September, online assessments were implemented which trainees can complete after attending face-to-face courses. This will allow for better evaluation of the effectiveness of the training and the results will feed into course updates and reviews. It is hoped that it will also provide a valuable opportunity for the trainee to review what they have learned and identify any areas which may require further study.
Number of F2F courses Number of training places Incl. distance, e-learning & FIF core courses Financial Inclusion Fund CPD places Total training places 2007 83 5,356 n/a 5,792 2008 108 5,065 302 5,870 2009 2181 7,706 412 8,310 2010 320 5,984 567 6,125 2011 295 5,345 237 5,817 Q1 12 73 1,257 294 1,720 Q2 12 77 1,288 415 1,804 Q3 12 47 904 72 990 Q4 12

Specialist Support England and Wales In Q3 Specialist Support received 1,036 new cases from 366 different agencies. There have been some noticeable changes in the types of enquiries which Specialist Support have received, between Q1 and Q3 there has been a 41% drop in cases relating to mortgages / secured loans, a 40% drop in cases related to bailiffs, 29% drop related to consumer credit and a 17% increase in cases on DCC (County Court). Specialist Support remains active in improving money advisers knowledge, skills and expertise through other activities including being involved in network groups and writing for Arian and Adviser publications. In this quarter, a survey of Arian readers was conducted and the conclusions from this survey will inform how Arian is developed in the forth coming year.
Case Type New cases Case contacts Cases with 3 or more contacts New cases non CABx No. of different agencies No. of different non CABx agencies FIF cases Query Type Insolvency Consumer credit Other/ miscellaneous Mortgages/ secured loans DCC (County Court) Bailiffs Limitations 2009 4,437 10,437 724 462 706 221 1,128 2009 1,507 575 448 259 464 155 163 2010 5,135 11,887 1,012 972 701 210 1,435 2010 2,180 550 384 267 446 166 193 2011 4,802 11,186 926 969 680 214 1,322 2011 2,043 295 718 211 440 207 207 Q1 12 1,195 2,852 226 246 404 111 348 Q1 12 519 82 102 59 75 60 48 Q2 12 1,164 2,544 207 185 382 91 353 Q2 12 532 74 83 62 69 43 48 Q3 12 1,036 2440 215 189 366 74 309 Q3 12 446 58 109 35 90 36 45 Q4 12 Q4 12

5) Research, Policy and Information CASHflow In September, MATs Client Support Steering Group met and made recommendations to assist the progress of CASHflow. The recommendations were to Promote the service directly to debt advice clients Links to CASHflow are now included on the Beat the Recession Project (NI), Directgov and Money Saving Expert websites. Provide more information to the advice sector on the differences between the various self-help tools available. Continue to promote the tool to face-to-face projects. Common Financial Statement (CFS) A review of the Common Financial Statement is currently underway to ensure that it continues to be an effective and sustainable budgeting tool. As part of this process, a survey of Advice UK, Citizens Advice, British Bankers Association, Finance and Leasing Association and Building Societies Association members (all of whom are represented on the CFS sub-group) was conducted to gather insight into the ways in which the CFS is used. A good response to the survey was received and with positive responses. The survey has highlighted a number of development areas for consideration, and over the coming months the CFS sub-group will be working to determine future direction. Research on sustainable payments This research report has now been completed and was launched to the media on Monday November 5th with some useful press coverage. The report draws on both quantitative and qualitative findings, using the in-depth interviews to add detail and analysis to the broader findings from the survey data. Loughborough University presented the research findings to the latest Partnership Board meeting in Cardiff. As well as presenting the findings to the media, we will also be engaging parliamentarians by writing, with Lloyds Banking Group (which funded the research) to selected MPs across the UK in order to share some of the key outcomes and policy points. In terms of best practice for debt management companies and creditors, the research highlights several factors that impact heavily on the long term sustainability of debt repayment plans. The practice of completing a comprehensive budget before agreeing to repayment levels was a clear factor amongst more successful plans, as was ensuring that those repaying debts were kept well aware of their progress. Flexibility from creditors in being willing to adjust repayment levels if a customers circumstances change, was also a factor in successful plans, as was proactive engagement in the case of a customer missing payments. The research found that creditor contact was a significant driver of people seeking to gain control of their debt problem. More effective signposting by creditors to free advice services should ensure that this trigger for action is well utilised and those looking to get back into financial health have the knowledge and tools to help them make the more informed decisions that lead to sustainable repayment plans. Responses to policy/consultation papers There were no submissions to formal consultations in Q3; however, MAT attended a consumer panel meeting discussing the transitioning of consumer credit to the Financial Conduct Authority. Following the meeting MAT submitted a paper outlining its top five areas of consumer detriment as well as two informal papers on the new licencing regime. Other policy: Throughout July, MAT, Advice UK and Citizens Advice worked together to record cases of unacceptable private bailiff practices. This evidence was used to develop a policy campaign to lobby the Ministry of Justice to take action to on this issue and will also be used to engage the media. The main points of the campaign are that: unnecessary and costly bailiff action should be avoided so that vulnerable debtors are protected; advice has a central role to play; affordable repayments should be accepted; there should be a simple way of stopping action by enforcement agents; unfair and improper practices should be controlled; there should be a universal complaints procedure; and fees should incentivise good practice.

MAT attended an informal consultation group to discuss revisions to the National Standards for Enforcement Agents. The standards are not going out to full consultation but comments submitted by MAT and others in response to the transforming bailiff action consultation will be reviewed. MAT, with advice partners, has been lobbying for the Justice Select Committee to add Bailiffs to their list for 2013 and is in the process of setting up meetings with the Legal Service Board and Legal Ombudsman to see whether either can take forward recommendations set out in MATs consultation response on the need for an independent complaints process.

7) Appendices Appendix 1 - Funding status Jan Dec 2012 Case for Support 2012 Target 5,808,000 2,489,000 1,650,000 9,947,000 Case for Support 2012 Target 5,940,280 (1,550,000) 1,084,280 Actual to September 2012 4,315,438 896,899 1,300,623 6,512,960 Actual to September 2012 Target October December 2012 1,931,942 815,486 513,230 3,260,658 Target October December 2012 1,739,974 (390,645) 299,355 Total 2012 Target Income 6,247,380 1,712,385 1,813,853 9,773,618 Total 2012 Target Allocation (a) (b) (c)

Private sector Government Self-generated income incl. Investment

TOTAL
PROPOSED ALLOCATION

DIRECT SERVICE PROVISION National Debtline - Income Generated Business Debtline ADVISER SUPPORT SERVICES Adviser Support - Income Generated Research, Policy & Information Grants & Contracts Face To Face Debt Advice Project

4,354,881 (1,226,556) 867,296

6,094,856 (1,617,201) 1,166,651

(d) (e)

TOTAL Surplus/Shortfall Brought forward from 2011 Reserves including Contingency Carry forward to meet commitments in 2013 (a) (b)

1,394,640 (112,500) 399,800 1,065,000 63,000 9,947,000

879,132 (48,067) 314,598 743,557 87,525 7,246,991

565,570 (52,949) 153,129 508,112 159,883 3,426,022

1,444,702 (101,016) 467,727 1,251,669 247,408 10,673,013 (899,395) 5,903,963 3,750,000 1,254,568

(f) (g) (h) (i) (j)

(k) (l)

(c) (d) (e) (f) (g) (h) (i) (j) (k) (l)

Private sector income up on original forecast. The Funding Model Working Party is helping to widen the net. One year agreements agreed with key funders. Includes contributions for both NDL and BDL. BIS contributes 1m pa to NDL, 225k pa to BDL. MoJ contributes 169K pa to NDL. Scottish Government contributes 110K pa to NDL. Drop in Government funding is due to loss of emergency funding from the 2008 pre-budget report as well as reduction from MoJ and tapering down of support for BDL by BIS. This includes income derived from Debt Management Plans as well as commercial activity undertaken by MAT such as selling training. Additional expenditure linked to overhaul of website and improved CRM database. Additional staff to help meet demand plus website and CRM project work. Adviser Support incorporates wiseradviser training and the Sector Support budget, which includes My Money Steps. Income generated from the selling of MAT services such as training and consultancy. Additional research project covered by sponsorship. Budgeted figure anticipated that further cuts would need to be made. Last quarter payment. Confirmation of funding received from Money Advice Service to continue face to face training during 2012. Designated Funds from previous year for certain projects has been carried forward and used to off-set the additional expenditure. MAT auditors suggest that, given the current uncertainties and economic climate, reserves of up to 9 months running costs is considered prudent.

Appendix 2 - National Debtline figures

2008 Calls answered 171,647 Emails 7,971 Literature 2,476 Total clients 118,120 % of tel clients who attempted to access the service and 79% were helped Calls - Scotland (%) 4.85% Average duration of advice 16m 16s calls Clients referred: F2F debt advice other advice DMPs to CCCS / Payplan Income from DMPs Top 6 Referrals (%) Internet Citizens Advice Line Creditor Advice Agency Friend / relative Media Phone book Most Reported Debt types 2008 Bank BSoc Loans Overdrafts Catalogues Council Tax Credit Cards Charge Cards & Store Cards Fuel debt Hire Purchase Conditional Sale Mortgages Pay day loans Rent Telephone Water Debt owed No debt owed > 5,000 5,000 - 15,000 15,000 - 25,000 25,000 - 50,000 50,000 - 100,000 <100,000 NDL Website Unique users Repeat visitors) % Av. Page views Av. Time 66% 10% 15% 64% 9% 7% 18% n/a 7% 5% 4% 2010 2% 22% 30% 17% 19% 7% 2% 2010 515,255 36% 3.78 3.58 2009 68% 10% 15% 66% 11% 8% 12% n/a 11% 5% 4% 2011 2% 26% 31% 16% 16% 6% 2% 2011 491,588 34% 2.92 3 3% 17% 2009 211,369 12,568 5,594 149,838 63% 7.08% 16m 53s 2010 212,335 8,127 3,600 156,027 85% 5.7% 16m 02s 2011 194,526 7,385 1,210 136,715 86% 4.72% 16m 33s Q1 12 50,728 1,728 199 36,044 90% 4.64% 16m32s Q2 12 42,011 1,372 89 28,932 84% 5% 16m 34s Q3 12 47,767 1,282 74 34,046 81% 4% 18m 06s Q4 12

2% 18%

2% 24%

3% 28%

2% 27%

2% 27%

3% 25%

3,047 3,714 4,026 3,949 865 616 819 912,432 1,126,455 1,312,379 1,505,187 397,495 392,997 386,818 2008 38% n/a 10% 17% 10% 5% 10% 2009 40% n/a 15% 15% 8% 4% 5% 2010 41% n/a 14% 15% 9% 3% 4% 2011 42% n/a 12% 14% 9% 2% 3% Q1 12 41% n/a 10% 16% 8% 3% 3% Q2 12 39% n/a 10% 16% 8% 3% 2% Q3 12 27% 20% 8% 16% 6% 2% 2% Q4 12

% Total exceeds 100% as clients report multiple debt types 2010 2011 Q1 12 Q2 12 Q3 12 Q4 12 58% 68% 63% 60% 59% 12% 17% 64% 13% 8% 13% n/a 7% 6% 7% 13% 19% 60% 14% 9% 15% n/a 9% 8% 9% Q1 12 2% 29% 32% 16% 14% 5% 1% Q1 12 140,390 32% 2.79 2.5 14% 20% 57% 15% 8% 15% 9% 9% 9% 10% Q2 12 3% 30% 33% 15% 14% 5% 2% Q2 12 114,637 29% 2.37 2.14 15% 19% 56% 16% 8% 15% 11% 9% 10% 10% Q3 12 3% 34% 32% 14% 12% 5% 1% Q3 12 Due to a problem with the web stats service data is not available for this quarter. 15% 21% 53% 16% 8% 15% 11& 11% 10% 11% Q4 12

Q4 12

Appendix 3 - Business Debtline figures

Calls answered Emails Literature Total client contacts Total clients % of tel clients who attempted to access the service and were helped Calls - Scotland (%) Average duration of advice calls Top 6 Referrals (%) Citizens Advice National Debtline Internet CLS CCCS Bank Main reason for contact (%) Bad debts Bailiffs Bank Bankruptcy/ insolvency Business leases Business rates / Council Tax Court proceedings Disputes HMRC tax debt Late payers Other creditors Personal creditors Trade shortfall Debt owed No debt owed > 5,000 5,000 - 15,000 15,000 - 30,000 30,000 - 50,000 50,000 - 100,000 <100,000 Not known Business classification Agriculture / forestry / fishing Construction Finance / insurance / real estate Manufacturing Retail Services Transportation Wholesale Not known BDL Website Unique users Repeat visitors Av. Page views Av. time on site 2008 23,427 n/a 404 23,837 15,500 61% 1.3% 18m 2008 23% 26% 6% 6% 12% 3% 2008 5% 3% 6% 14% 4% 3% 7% 4% 9% 3% 6% 15% 12% 2010 6% 6% 12% 18% 18% 17% 9% 14% 2010 1.2% 10.3% 4.6% 1.7% 17.7% 51.1% 4.1% 0.8% 8.5% 2011 57,100 27% 4.81 2.54 2009 25,785 n/a 1,003 26,788 17,795 65% 2.5% 19m 36s 2009 25% 22% 7% 6% 5% 4% 2009 2% 3% 6% 14% 3% 3% 6% 3% 6% 3% 5% 18% 17% 2011 7% 6% 14% 17% 17% 16% 9% 14% 2011 0.9% 9.5% 5.3% 1.3% 16.6% 54.9% 3.3% 6.0% 7.4% Q1 12 15,265 29% 4.89 3.1 2010 36,046 n/a 879 38,430 24,594 86% 3.1% 18m 57s 2010 25% 24% 10% 6% 5% 6% 2010 2% 3% 7% 14% 3% 2% 6% 5% 6% 2% 5% 18% 18% 2011 37,746 n/a 374 39,416 26,290 87% 4% 18m 13s 2011 23% 26% 9% 9% 5% 4% 2011 2% 3% 5% 12% 2% 3% 7% 4% 7% 3% 6% 19% 16% Q1 12 6% 7% 15% 18% 17% 14% 8% 14% Q1 12 1% 11.1% 5.6 1.5% 18.3% 50.3% 3.8% 0.6% 7.5% Q2 12 16,709 23% 4.66 2.52 Q1 12 9,700 n/a 139 10,499 7,003 83% 4% 18m 55s Q1 12 23% 27% 10% 7% 4% 4% Q1 12 2% 3% 5% 11% 2% 3% 7% 4% 7% 4% 7% 19% 15% Q2 12 6% 7% 15% 18% 16% 14% 8% 15% Q2 12 1% 11% 6% 1.4% 18% 50% 3.8% 0.6% 8% Q2 12 8,321 n/a 104 9,043 6,032 83% 3.5% 18m 54s Q2 12 21% 29% 9% 7% 4% 5% Q2 12 2% 3% 5% 12% 2% 3% 6% 4% 7% 3% 6% 21% 13% Q3 12 8,857 n/a 87 9,375 6,253 84% 3.3% 18m34s Q3 12 21% 31% 8% 7% 3% 5% Q3 12 2% 3% 5% 12% 3% 3% 6% 5% 7% 3% 7% 20% 13% Q4 12 Q4 12

Q4 12

Q3 12 6% 7% 16% 17% 15% 13% 8% 17% Q3 12 1% 10.2% 6.2% 0.8% 18.4% 50.7% 3.3% 0.4% 8.7% Q3 12 13,355 29% 4.47 2.51

Q4 12

Q4 12

Q4 12

Appendix 4 Funders Allied International Credit American Express Foundation Argos Bank of America Barclays Bank plc Barclaycard British Gas (here to HELP) BT plc Building Societies Trust Limited Department for Business, Innovation and Skills Esme Fairbairn Foundation Experian Finance & Leasing Association HM Treasury HSBC Bank plc Insolvency Service Lloyds Banking Group plc Ministry of Justice National Australia Bank Group Nationwide Building Society npower Optima Legal Payplan Ltd Provident Financial Santander SSE Scottish Government Standard Life Step Change Debt Advice Charity Swift Advances plc The Royal Bank of Scotland Group Wescot Credit Services Wessex Water Yorkshire Building Society

Appendix 5 MAT Partnership Board members Advice Providers Advice NI Advice UK Citizens Advice Citizens Advice Northern Ireland Citizens Advice Scotland Institute of Money Advisers Money Advice Trust Money Advice Scotland Payplan Step Change Debt Advice Charity Creditor Sector British Bankers Association Barclays plc British Gas HSBC plc Lloyds Banking Group Santander The Royal Bank of Scotland Group plc

Government and Public Sector Cabinet Office Department for Business, Innovation and Skills Department of Enterprise, Trade and Investment (Northern Ireland) Department of Work and Pensions HM Treasury Local Government Association Ministry of Justice Scottish Government Welsh Assembly Government MAT contacts Money Advice Trust 21 Garlick Hill London EC4V 2AU Tel: 020 7653 9722 Fax: 020 7489 7704 Website: www.moneyadvicetrust.org President Baroness Coussins of Whitehall Park Trustees Martin Hall MVO, MBE, Chair Lady Bloom CBE, Deputy Chair Mike Barley Martyn Gimber Judith Mortimer Sykes Ambassadors Liz Barclay The Rt Hon Sir Ian McCartney Contact details Joanna Elson OBE CDir Chief Executive Tel: 020 7653 9720 joanna.elson@moneyadvicetrust.org Neelam Samra Jenny Watson Claire Whyley Sian Williams Merrick Willis OBE Sir Brian Pomeroy CBE

Jon Elwes Head of External Affairs Tel: 020 7653 9722 jon.elwes@moneyadvicetrust.org

10