Chapter 3: An overview of public funding of advice services in Scotland
This chapter outlines the legislative and policy directives that underpin the funding decisions made by public sector organisations. It describes the rationale for the allocation of funds from public sector organisations to support advice provision as two-fold.
In the first instance, certain legislative requirements compel Governments at local and national levels to ensure that information and advice are available to the public so that they understand their rights and entitlements. An example of this is funding allocated by Scottish Government to Citizens Advice Scotland to provide independent patients' rights advice as required by the Patient Rights (Scotland) Act 2011. In this instance the funding is allocated by Scottish Government and the contract is managed by a special health board within NHS Scotland.
Secondly, policy commitments drive funding decisions. An example of this is the policy commitment to offer a universal financial health check which forms part of the Scottish Government's ambition to improve the financial health of everyone as part of its Wealthier and Fairer manifesto commitment.
In this chapter, we also give an overview of the type and range of public bodies currently funding and in receipt of public funding for advice services in Scotland. We outline the level of public funding that supports advice services and highlight the different and multiple sources of public funding that are directed to advice providers.
This chapter provides further detail regarding the destination of public funding for advice provision in Scotland. We have split this into two connected sections, the first details the funding distributed by Scottish Government, Local Authorities, NHS Scotland, Scottish Legal Aid Board ( SLAB), and Accountant in Bankruptcy  . The second section provides information from recipients of public sector funding.
This chapter draws on information from our review of the available literature, information supplied by the Scottish Government, and primary data collected through the survey of advice providers, interviews and the stakeholder event.
Funding provided by the Scottish Government
The Scottish Government funds advice provision both indirectly through its block grants to Local Authorities, core funding to the Accountant in Bankruptcy, SLAB and the various NHS Boards. It also provides funding for specific policy initiatives to SLAB and NHS Scotland boards that support advice provision. In addition, it provides a range of grants directly to public sector partners and non-statutory organisations and third sector organisations to deliver advice.
The Scottish Government has estimated that it has provided over £21 million of project funding for advice services in 2016/17. This funding is supporting advice provision for individuals on income maximisation (including welfare, debt and financial capability advice, and advice on reducing household costs such as energy bills); and/or statutory civil rights, including how to seek recourse if those rights are not upheld.
In addition, the Scottish Government has further budget provision of up to £20 million to provide civil Advice and Assistance (A&A) through the statutory legal aid scheme. This supports payments to solicitors to deliver legal advice on civil matters to qualifying clients. This advice includes advising whether there is a legal case to take forward, negotiating a settlement, and writing letters on the applicant's behalf. A&A will not usually cover representation in court although a type of A&A - 'Assistance By Way of Representation' ( ABWOR) is available in some circumstances to allow a solicitor to represent their client in proceedings. Civil Advice and Assistance is out of scope of this research.
Further information about the funding issued by the Scottish Government is detailed in the section of this chapter examining the funding received by Third Sector organisations.
Funding provided by Local Authorities
Local Authorities in Scotland provide funding for information and advice services either through direct service provision or through their commissioning activity. These services span the range of activities that Scottish Local Authorities have responsibility for and include advice for families, carers, welfare benefit recipients and consumers. In addition, Local Authorities are active in the economic development of their areas and work with partners to provide employability services and advice to jobseekers.
Estimates indicate that Local Authorities spent circa £30 million on advice service provision of which approximately £20 million was directed towards money advice provision (The Scottish Government 2014).
Money advice provided by Local Authorities
Previous research indicates that Scottish Local Authorities are the biggest providers, either directly or indirectly, of money & debt advice (Improvement Service 2015; Burfeind et al. 2013).
Many support local Citizens Advice Bureaux and have strong links to credit unions in their area. At a local level, strong relationships often exist between these services, and financial inclusion strategies promote collaboration between partners. Some councils support particular initiatives such as developing budgeting and money management skills, and access to banking facilities or access to alternative and cheaper credit, for example, ScotCash in Glasgow ( CoSLA 2011). The Confederation of Scottish Local Authorities ( CoSLA) reports that welfare benefit changes, including the introduction of Universal Credit, Pension Credit and Personal Independence Payments ( PIP), is likely to result in longer term indebtedness for residents and an increase in housing arrears. They suggest that the 'self-service online access' element of Universal Credit will prove to be problematic for people who have low information literacy or are not able to access online services independently. As such, they expect that the requirement for support and advice will increase ( CoSLA 2011).
The Improvement Service ( IS) conducted a survey of Local Authorities which found that, in 2014/15, Local Authorities invested around £21m into money advice (Improvement Service 2015). A more recent survey published by IS suggests that this figure reduced in 2015/2016, and that the level of investment by Local Authorities in money advice services currently stands at around £13million-£15million (Carrick et al. 2016).
The Improvement Services reports that current Local Authority funding for money advice services is allocated as follows:
- Circa £4,953,000 allocated to in-house services; and
- Circa £8,754,000  allocated to outsourced provision.
Local Authority investment in money advice services is used to provide a range of money advice services in a variety of settings (Improvement Service, 2015). Based on feedback received from 29 Local Authorities for the financial year 2014/15, 25 of these services were in-house services and 69 were services delivered by external providers (Improvement Service 2015). More recent figures suggest that the number of in-house services has reduced. IS report that for the period 2015/16, there are 23 in-house services and 73 external money advice services (based on returns received from 31 Local Authorities). IS suggest that this serves as an indication that there is a potential shift in service design taking place. In support of this they report that eight Local Authorities no longer have an in-house money advice service. Meanwhile, 20 Local Authorities support both in-house delivery and externally funded advice provision and three Local Authorities do not fund the delivery of money advice services by external providers.
The performance management frameworks prepared by the Improvement Service also point to a reduction in staffing levels, noting that fewer staff are reported to be employed directly by Local Authorities to offer money advice services and that overall there are fewer full time equivalent staff (employed or voluntary) delivering the outsourced element of money advice services.
Other advice provided by Local Authorities
Local Authorities offer advice on a range of topics beyond money advice, for example, welfare benefits advice, consumer advice and adoption advice. One example of how this is delivered is through the network of 61 Citizens Advice Bureaux across 30 of Scotlands 32 Local Authorities, in 300 outreach locations which offer advice on a range of topics. Many are in receipt of funding from Local Authorities to do so.
The literature does not comprehensively outline the funding attributed to non-money advice by Local Authorities and the scope of this research did not allow for this information to be captured directly from Local Authorities. As a result, it is not possible to confirm the level of additional spend made by Local Authorities on "other" advice provision. Nor is it possible to determine the extent to which advice on other topics is delivered in-house or is outsourced or the levels to which all budgets may have been affected by recent Local Authority budget cuts. We understand that the Scottish Government may work with Local Authorities to gather this information at a later stage of the wider study in order to enhance the information provided in this report.
The approach adopted by the Improvement Service, in partnership with Money Advice Service, to engage with Local Authorites to assess the nature of money & debt advice across Local Authorities, draws on the experience of measures developed for Economic Development. A similar approach could be adopted to assess the nature and extent of 'other' advice provided by Local Authorities.
Funding provided by NHS Scotland
The available literature does not attribute quantifiable amounts of investment to the NHS, and the focus of much of the literature is on individual projects and pilot programmes – examples of which can be found in this report. Therefore, it is not possible to give an accurate overview of the level of funding directed to the variety of advice activities undertaken by NHS Scotland.
For the purpose of this review, we are concerned with the involvement of NHS Scotland in the provision of advice that has a positive impact on health outcomes, as opposed to health advice per se. The Scottish Government's Mitigating the Impact of Welfare Reform on Health and NHS Health Services, Outcome Focussed Plan provides a focused response to mitigate the anticipated adverse impacts of the Welfare Reform Act (2012), involving:
- securing personal/household income (referrals to money advice and employability services);
- maintaining socio-economic status, (rehabilitation back to work or to stay in work when off sick);
- keeping people close to the labour market (referrals to employability support, NHS work placements and volunteering, Modern Apprenticeships);
- reducing household costs (food co-ops, growing schemes); and,
- reducing barriers to services (service design and location, reducing barriers relating to protected characteristics).
NHS Scotland is currently mapping its activity against these outcomes and initial reports suggest that a range of activities are taking place in a number of health board areas, with some activities directly funded and delivered from Board finances and other activities co-designed and delivered with partner agencies, including citizens advice and Local Authorities. In addition, a number of NHS Scotland territorial boards have a long-standing relationship with the Jobcentre network to offer employability advice and opportunities. This mapping activity is scheduled to report on its findings in 2017 and this will provide Scottish Government with further detail regarding the level of investment and source of such investment in advice service provision across NHS Scotland's health board areas.
Funding provided by Scottish Legal Aid Board
The Scottish Legal Aid Board is funded by the Scottish Government to administer Legal Aid. Legal Aid is available to enable individuals on low or modest incomes to access the legal system. This access can take the form of receipt of advice and assistance and this includes representation to allow a case to be taken to court. SLAB funds and provides advice and representation services in three main ways:
1. through case-by-case allocation of legal aid;
2. by directly employing solicitors; and
3. via its grant funding powers.
The case-by-case allocation of legal aid will in the main be used to enable access to a range of advice but includes Type III advice which is beyond the scope of this study. Through its direct employment of solicitors and other core functions SLAB offers Type I & Type II advice. Examples of this provision include the 24 hour SLAB Solicitor Contact Helpline and the advice available on its website (The Scottish Government 2014). This advice encompasses a range of rights advice. However, the solicitor helpline is for people who may be about to enter the criminal justice system and falls out-with the scope of this review.
This review has concentrated on the SLAB support of Type I and Type II advice services made through its 'grant funding' activity. SLAB manages budgets for three key programmes - the Making Advice Work programme; the Economic Downturn Programme; and the Tackling Money Worries Programme. These are described below:
The purpose of the Making Advice Work ( MAW) programme is to support organisations helping people in Scotland facing debt and other problems stemming from benefits changes and the on-going impact of the economic downturn.
The focus of the MAW programme was agreed with Scottish Ministers and the Money Advice Service to ensure that its activity supports priority areas. The initial investment in this programme, which ran from October 2013-March 2015, but has been extended through to March 2018, was £7.45million. A range of organisations have received funding from this fund include national charities such as Shelter, a range of housing associations, a number of Local Authorities and a significant number of local voluntary organisations (including, for example, CABx).
The Tackling Money Worries programme is designed to focus on improving outcomes for low-income families with children facing a change in their circumstances which places them at higher risk of debt and money problems. It focusses on achievement of priorities of the Scottish Government and the Money Advice Service ( MAS) and ran initially from October 2014-March 2016 and has also been extended until March 2018. The initial investment in this programme was £2.4million.
The Economic Downturn programme (October 2012-March 2016), which has also been extended until March 2018 (renamed Early Resolution and Advice Project), operates two funding streams. Stream 1 projects provide direct assistance and representation for people facing court action and therefore falls outwith the scope of this review. Stream 2 projects provide information, one-off advice and signposting to people with small claims and other civil court matters to increase people's ability to navigate the court process themselves or to seek further assistance and casework assistance to people with small claims-level cases enabling them to resolve matters pre-action or settle them early in the court process. The initial investment in this programme was £7million.
All three of these programmes have had additional monies allocated to them that have allowed selected projects to be continued.
Funding provided by Accountant in Bankruptcy
The Accountant in Bankruptcy ( AiB) is a non-departmental government agency. The introduction of the Bankruptcy and Debt Advice (Scotland) Act 2014 put debt advice at the forefront of AiB's policies. AiB provides funding to a range of organisations which support this policy. Its funding is made available through four different funding streams, detailed below:
1. Money Advice Training Resources Information Consultancy Service ( MATRICS) - The AiB has provided grant funding on an annual basis from the financial year 2011/2012. The funding is used to fund a joint initiative between Citizens Advice Scotland and Money Advice Scotland to deliver second tier training to money advisers. Money Advice Scotland received £102,224 in the financial year 2016/2017 and Citizens Advice Scotland received £87,318 for the same period. This funding doesn't provide direct provision of Type I or Type II advice but the funding is used to ensure that money advisers are appropriately skilled, and ensures that those that need it are able to access quality advice when considering bankruptcy.
2. The Financial Health for Everyone Project - The Bankruptcy and Debt Advice (Scotland) Act (2014) introduced a provision for mandatory financial education for debtors under certain circumstances going through statutory debt relief solutions. Money Advice Scotland received £186,589 to offer this service for the period 2016/2017. This information is classed as education and therefore may not fall into the categories of Type I and Type II advice.
3. Scotland's Financial Health Service ( SFHS) Helpline - The Accountant in Bankruptcy awarded £99,390 to Money Advice Scotland to operate this helpline. Money Advice Scotland report that the helpline allows them to make the information that is available on their website available by telephone, thus extending the ways in which they can offer advice. Money Advice Scotland works with partner organisations such as Stepchange Debt Charity to monitor and obtain feedback on client outcomes. Other partners that they work with include Citizens Advice Bureau, Shelter Scotland, Christians Against Poverty and Scottish Local Authorities.
4. National Debtline - The National Debtline is a UK telephone and web service run by the Money Advice Trust. To date the AiB has provided funding to the Money Advice Trust to ensure that Scottish-specific advice was part of the offering. AiB will not be contributing to Money Advice Trust in the future. It provided an award amounting to £110,000 to Money Advice Trust for the financial year 2016/2017.
Funding provided by non-statutory organisations & the Third Sector
Non-statutory organisations and third sector organisations provide advice services on a range of topics to members of the public using a variety of channels. To deliver these services, organisations rely on funding from a range of sources. These sources include organisations such as Big Lottery Fund, private trusts (such as Energy Savings Trust), and others such as utilities companies.
In some instances legislation compels or allows public funding for particular types of advice to be directed to specific organisations (for example, the provisions related to consumer advice contained in the Scotland Act (2016)). It can be distributed in the form of direct awards, for example payments to support consumer advice provision are funded directly from Scottish Government to Citizens Advice Scotland, or in support of policy directives, such as the funding provided to the Energy Savings Trust. However, other funding awards require competitive tendering and are open to a range of organisations, including housing associations and charitable organisations.
Key examples of organisations funded in this way are provided in Appendix 2.