Charity boss calls for revamp of debt rules fuelling poverty trap

The way councils collect tax is trapping families in poverty and must be overhauled, according to a leading children’s charity.

Aberlour is calling for greater communication between public sector organisations pursuing arrears and a better understanding of how debt collection can propel families into financial crisis.

Chief executive SallyAnn Kelly, speaking before a landmark conference on public debt tomorrow, said how debts like council tax and rent arrears are pursued in the public sector can be faster and crueller than in the private sector.

She said: “It is now beyond question that public debt and how it is collected often removes any prospect of families escaping poverty.

“It is meaningless for ministers to prioritise child poverty and promise to help families struggling to get their heads above water while other public sector organisations are pressing them down.”

Kelly said there are ways to collect – or write off – debt that would deliver far greater benefits for families and communities.

She said: “It would mean families keeping their homes, children not going into care, and parents being helped back into work.

“Every pound spent chasing debts that families cannot pay would be recouped many times over in reduced health and social care in the years to come.”

Research suggests payments to families in Scotland receiving Universal Credit are reduced by almost £1000 a year because of public debt and one council department will often have no idea another is also clawing back money from the same family.

A three-year pilot programme in Tayside, led by Aberlour and supported by The Robertson Trust and the Corra Foundation, helped three councils trial new ways of collecting arrears and, Kelly says, underlined the need for a new and national framework for public debt recovery.

Aberlour, which is marking its 150th anniversary this year, is stepping up its campaign for changes in how public debt is collected after helping secure £2.8m of Scottish Government funding to write off debt linked to school meals last year.

Kelly will be one of the keynote speakers at the conference tomorrow detailing how public debt can underpin child poverty.

Co-hosted by the charity and the University of Glasgow’s Centre for Public Policy, speakers will include Shirley-Anne Somerville, social justice secretary; Nicola Killean, Children and Young People’s Commissioner Scotland; Nicola McEwan, director of the Centre for Public Policy.

Professor Morag Treanor is another keynote speaker at the conference and will discuss her landmark research suggesting public debt collection is a “root cause” of child poverty.

Treanor, professor of social policy and inequality at the University of Glasgow, said: “We need to talk about the root causes of social issues and, right now, the way public sector organisations pursue debt is a root cause of families becoming trapped in poverty.

“It could instead be one of the most effective ways of helping them escape.”

Once cycle begins it only spins faster

By Professor Morag Treanor

There are many warning signs that a family is on the brink of financial crisis and a new mother buying baby milk on an Amazon payment plan is only one.

She was one of the women interviewed as part of my research into how child poverty is caused and might be eased and illustrated how public policy impacts real lives.

New mothers once got vouchers for free powdered milk at the health clinic, for example, but that stopped and breast-feeding was encouraged instead.

Today, they get payments to help with food but not enough to cover powdered milk so they also don’t get the same level of informal contact with health professionals, the sense of community and all the support that goes with attending the clinic to collect free milk.

The woman interviewed had four children under six but only getting benefits for the two eldest because of another policy, the Two Child Limit. Buying baby milk on an Amazon payment plan made sense in the moment because she had no other option but, as she tried to pay off more and more debt, more and more money was being taken from her benefits.

Policies matter, they have consequences, intended and unintended and it is now beyond question that public debt and how it is collected underpins poverty in our country.

Families on low-income can be paying £1000 a year from Universal Credit to repay old public debts. The records collected from across the public sector as part of my research confirm it and so do the interviews when I spoke to families stuck fast in a cycle of debt and borrowing.

It’s a cycle that only spins faster and faster but councils and other public sector organisations can do far more to help slow then stop it.

The conference co-hosted by the University of Glasgow and Aberlour tomorrow will hear how better communication between public sector organisation and with those owing them money is crucial along with a greater understanding of how debt collection can trap families in poverty.

The way public sector organisations pursue debt is a root cause of families becoming trapped in poverty. It should be one of the most effective ways of helping them escape.