Organisations call for pause to public debt recovery for families on a low income in Scotland
Family Fund has joined over 50 non-profit organisations to send an open letter to the Deputy First Minister, John Swinney MSP asking for public bodies in Scotland to pause debt recovery for those on the lowest incomes, to give families breathing space during the cost-of-living crisis.
Paying back this debt means families often cannot afford to pay for the most basic essentials for their children. This include heating and food.
Feeding into the 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.
View the full letter below
Dear Deputy First Minister,
We are writing to you as a coalition of organisations who are deeply concerned about the debt crisis people on the lowest incomes in Scotland face. Specifically, we are alarmed 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.
That is why we urge you to use the upcoming Budget (Scotland) Bill to commit to support those locked in a cycle of debt to public bodies. Including through a six month moratorium on collection of debt and arrears to public bodies in Scotland. We know this is contributing to rising poverty in Scotland and limiting the impact of other measures, such as the Scottish Child Payment, in its aim of reducing child poverty.
Many of our organisations are seeing increasing demand on hardship funds and financial support we provide to help those burdened with unsustainable levels of public debt. These debts typically include council tax arrears, Universal Credit advance payments, water charges, local authority service charges – and even school meal debt.
With unmanageable financial pressures for households on the lowest incomes many simply cannot absorb more costs as they fall deeper into debt trying to make ends meet. Paying back debt means households cannot afford to pay the bills and families are unable to buy the most basic essentials for their children.
Recent research published by Aberlour highlighted the scale of debt to public bodies owed by Scottish families with children in receipt of Universal Credit. This evidence shows that more than half of those 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. This means that tens of thousands of families eligible for the Scottish Child Payment are not feeling the full benefit of that financial help as most of the increase in income it provides is cancelled out by deductions to cover these debts.
Further research commissioned 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. As a result, 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. Public authorities have a vital role in
tackling poverty and should be at the forefront of the fight against the cost of living crisis, but instead through debt recovery measures they can actively compound it.
We welcome the action the Scottish Government has already taken to help low income families this year. The increase and full roll out of the Scottish Child Payment has made a huge difference to families across Scotland. But as our evidence has shown for those families weighed down by debt to public bodies the payment is being swallowed up and is not having the intended impact. In effect what we are seeing is Scotland’s poorest families receiving help with one hand that is being taken away by the other.
We now need government at all levels to act differently in response to those struggling with debt to public bodies. That is why we are urging you to use the Scottish budget to support a moratorium on public debt recovery for at least six months to give households breathing space and allow for reassessment of ability to repay debt and arrears. This should include a commitment to provide funding and flexibility for local authorities to write-off existing debt liabilities for low-income households, providing them with a clean slate. Furthermore, this should also mean writing-off any debt or arrears built up by families with pre-school and primary school aged children not yet receiving free school meals. We believe these are immediate actions that Scottish Government can take that will alleviate the pressure off those trapped in poverty as a result of debt to public bodies.
Given the rising tide of poverty and the impact of the ever-worsening cost of living crisis, urgent action using the debt and arrears levers available to Scottish Government is vital to effectively respond to the emergency facing households across Scotland and to help meet the targets set out in the Child Poverty (Scotland) Act 2017.
We look forward to your response.
SallyAnn Kelly OBE, CEO, Aberlour
Dr Jim McCormick, CEO, The Robertson Trust
Peter Kelly, Director, Poverty Alliance
Chris Birt, Associate Director Scotland, Joseph Rowntree Foundation
Satwat Rehman, CEO, One Parent Families Scotland
John Dickie, Director, Child Poverty Action Group Scotland
Philip Whyte, Director, IPPR Scotland
Emma Jackson, National Director Scotland, Christians Against Poverty
Morag Treanor, Professor of Child and Family Inequalities, Heriot-Watt University
Mary Glasgow, CEO, Children 1st
Alison Watson, Director, Shelter Scotland
Claire Telfer, Head of Scotland, Save The Children Scotland
Alison Bavidge, National Director, Scottish Association of Social Work
Paul Carberry, National Director for Scotland, Action For Children Scotland
Jamie Livingstone, Head of Oxfam Scotland
Martin Crewe, Director, Barnardo’s Scotland
Martin Dorchester, CEO, Includem
Christine Carlin, Director Scotland, Home-Start UK
Claire Burns, Director, CELCIS
Dr Judith Turbyne, CEO, Children in Scotland
Cheryl Ward, CEO, Family Fund
Dr Ron Culley, CEO, Quarriers
Jimmy Wilson, CEO, FARE Scotland
Pat Rafferty, Scottish Secretary, Unite the Union
Sara Redmond, Chief Officer, Health and Social Care Alliance Scotland (the ALLIANCE)
Dr Donald Macaskill, CEO, Scottish Care
Sarah Davidson, CEO, Carnegie UK
Louise Hunter, CEO, Who Cares? Scotland
Charlie MacMillan, CEO, Scottish Commission for People with Learning Disabilities
Andrea Bradley, General Secretary, Educational Institute of Scotland
Laura Millar, Strategic Manager, Fife Gingerbread
Sabir Zazai OBE, CEO, Scottish Refugee Council
Suzanne Swinton, CEO, Scottish Independent Advocacy Alliance
Matt Downie, CEO, Crisis
Derek Mitchell, CEO, Citizens Advice Scotland
Neil McIntosh, Assistant Director, NSPCC Scotland
Jacqueline Cassidy, Director for Scotland, The Fostering Network
Dr Hartwig Pautz, Senior Lecturer in Social Sciences at the University of the West of Scotland
Mike Burns, Convenor of Social Work Scotland
Pete Ritchie, Director, Nourish Scotland
Marguerite Hunter Blair, Chief Executive, Play Scotland
Professor Chik Collins, Director, The Glasgow Centre for Population Health
Lisa Hough-Stewart, Interim Co-Director, Wellbeing Economy Alliance Scotland
Sharon Bell, Head of StepChange Debt Charity Scotland
Justina Murray, CEO, Scottish Families Affected by Alcohol and Drugs