Agenda item

[Report of the Director for Customers, Transformation and Resources. To be introduced by the Cabinet Member for Transformation and Public Realm Investment]

It is recommended that Cabinet:

a) Agree the approach to reducing debt amongst Haringey residents set out in the Debt Strategy. 

b) Authorise officers to undertake consultation with external stakeholders on the Debt Strategy [with a view to final publication in June].

The Cabinet Member for Transformation and Public Realm investment introduced the report which set out the Haringey Strategy for tackling debt, the purpose of which was to set out the levers the Council use, working with partners, to help residents avoid and mitigate problematic debt.

The Cabinet Member spoke about the stark inequalities in the borough with increased hardship and families struggling on low incomes with universal credit and low paid jobs. There were added new pressures to be faced with the furlough scheme coming to an end, unemployment, unsustainable housing coupled with a general uncertain economic situation.

The Cabinet Member spoke about the detrimental circumstances of debt and the far-reaching consequences it had with overwhelming negative impact on life chances and mental health. She spoke about the importance of preventing the spiralling of debt for individuals and families by creating and providing supportive economic and social conditions in the borough.

The Cabinet Member expressed that individuals and families in debt should be viewed as a potential safeguarding issue to prevent, rather than a collection of costs to pursue. Council services needed to understand if  individuals and families had enough food to eat before paying the debt owed.

The proposed strategy was transformative and proactive providing support to residents in new ways, in light of the impact of Covid and worsening economic situation. The strategy would further enable the Council to work smartly on prevention of debt through co-ordinating services and projects.

In response to questions from Cllr Palmer, the following was noted:

• With regards to forecasting loss of debt recovery, it was predominantly in the Council’s interest to help people not get to a position where they are able to pay their bills and not encounter a spiralling debt situation. From considering other borough’s similar work on this, the Council would be offsetting the debt recovery loss with an income rise. It was further noted that there was an estimated £16billion of unclaimed welfare support in the country. Newcastle City Council had taken forward a similar strategy with a focus on benefit maximisation , helping increase the income into the Council by £13m.
• Noted the general significant difficulties in understanding the benefit system and the ingenuity, patience and navigation skills required to understand entitlements to benefits and to make claims. Part of the Council’s ‘Here to Help’ scheme would help residents understand what they are entitled to and how to access this.

• The partners were not listed as the strategy was changing and setting  the agenda for whole borough. This covered all partners in the borough, including organisations, individuals, schools, faith congregations and the voluntary sector and was enabling them to identify that a person or family had debt issues and the potential for this situation to escalate. They had a responsibility to signpost  to organisations such as the Citizen’s Advice Bureau, relevant Council staff , and the benefit maximisation scheme.

RESOLVED

To agree the approach to preventing and mitigating debt amongst Haringey residents set out in the Haringey Strategy for Tackling Debt at Appendix 1.

Reasons for decision

The Borough Plan 2019-23 sets out a vision for a Haringey where strong families, strong networks and strong communities nurture all residents to live well and achieve their potential. There are a range of levers that the Council will employ to do this. Taking action to enable people to address problematic debt is one of these.

This commitment has taken on even greater importance since the emergence of the Covid-19 pandemic. We have already seen a sharp rise in claims for universal credit, an increase in unemployment, and more requests for assistance with emergency food and fuel. It is vital that our residents have positive tools and support to help them avoid entrenched debt.

There are residents in Haringey who are finding themselves in debt due to poverty, external economic factors beyond their control and the rise in the basic cost-of-living outstripping their income levels. The Haringey Strategy for Tackling Debt intends to clearly define and identify these residents and sets out a strategy on how we can use the levers available to us to tackle the debt they face.

Alternative options considered.

Do Nothing

The Council would not take steps to implement a Tackling Debt Strategy. This would curtail the possibility of achieving our objective of reducing debt amongst Haringey residents. This may also have a negative consequence on the public purse, with high levels of debt likely to lead to lower Council revenues and higher use of public services.

Take an alternative approach.

Adopt a debt strategy based on different principles and ways of working. The issues outlined in this paper might be addressed through a strategy and policy based on different principles and ways or working, but the proposed approach set out in this paper is based on evidence of what works and good practice from elsewhere.