Pause on Debt Recovery ahead of SG Budget called for by Anti-Poverty Coalition
A coalition of nearly fifty charities, anti-poverty organisations and campaigners have written to the Deputy First Minister, John Swinney MSP. They are calling on the Scottish Government to pause debt recovery for money owed to public bodies in Scotland by people on the lowest incomes.
Ahead of Tuesday’s budget debate at the Scottish Parliament the letter urges Mr Swinney to use the budget to support action to tackle the issue of debt to public bodies.
Signatories to the letter, including Aberlour children’s charity, The Robertson Trust and Christians Against Poverty (CAP) highlight their alarm at “the increasing level of debt owed to public bodies by the poorest in Scotland and the role this plays in trapping people in poverty”.
They are asking for public bodies in Scotland to pause debt recovery for those on the lowest incomes for at least the next six months, to give the poorest households breathing space during the cost of living crisis.
Organisations who have signed the letter say they are seeing increasing demand on their own hardship funds and financial support they provide in order to help those burdened with unsustainable levels of public debt.
These debts typically include council tax charges, Universal Credit advance payments, rent arrears and even school meal debt.
Paying back these debt means households often cannot afford to pay the bills and families are unable to buy the most basic essentials for their children.
Last year Aberlour published research that highlighted the scale of debt to public bodies owed by Scottish families with children in receipt of Universal Credit.
They found that more than half – nearly 80,000 families – have their monthly income reduced by around 10%, equating to £80 on average, as a result of deductions by the DWP to recover debts to public bodies.
As a result, tens of thousands of families who receive the Scottish Child Payment are not feeling the benefit of the increase in income it provides as it is swallowed up by deductions to cover these debts.
A further report published by The Robertson Trust highlighted that those on the lowest incomes are ten times more likely to have council tax arrears than those on the highest incomes.
This research showed that almost three quarters of those with debts to public bodies have avoided putting the heating on to save money, and more than half have cut down on meals.
The letter calls on the Scottish Government to use the debt and arrears levers available to them to urgently respond to the emergency facing households across Scotland, due to the ever-worsening cost of living crisis which they state is contributing to rising poverty.
Three actions that the letter urges John Swinney to commit to in the budget to tackle the “the debt crisis people on the lowest incomes in Scotland face” include:
- pausing public debt recovery for at least 6 months
- providing funding and flexibility for local authorities to write off public debts in some cases
- writing off of all existing school meal debt
Aberlour Chief Executive, SallyAnn Kelly OBE, said: “Low income families are in the midst of a debt crisis. Aberlour research has shown that tens of thousands of Scotland’s poorest families are seeing their monthly incomes reduced to cover debts to public bodies, including council tax charges, rent arrears and even school meal debt. Low income families are falling deeper into debt as they try to make ends meet. Many are relying on charities and foodbanks just to cover the basic things they need for their children. That’s why we are calling for a pause to public debt recovery for families on the lowest incomes to give them breathing space during the cost of living crisis. We need to help those with the least and stop giving with one hand and taking away with the other.”
CAP Scotland National Director, Emma Jackson, says, “We know problem debt can have a devastating impact on every aspect of people’s lives. Households on the lowest income are being disproportionately affected by the cost of living crisis and many are being pulled under. Debt and poverty are costing lives. Our Debt Coaches across Scotland are supporting people through the most difficult of circumstances as demand for our emergency aid is soaring. In a just and compassionate society, it is essential for the Scottish Government to use every mechanism available to provide help. A pause in public debt recovery would offer an essential life line to those who need it most.”