Advice NI's Consultation Response to DETI's Financial Capability Strategy 2013 – 2018 Consultation

Advice NI responded to the Department of Enterprise Trade and Investment's consulation on Financial Capability Strategy

FINANCIAL CAPABILITY STRATEGY 2013 – 2018 CONSULTATION

Completion Instructions

We would be very grateful to receive your comments and views on the proposals for a Financial Capability Strategy for Northern Ireland.

 Please answer the following questions as completely as you can.

 About You

 1. Are you responding as:

 Advice NI          

 2. Are you a professional/practitioner engaged in an aspect of financial capability?

 *Yes No

 If yes please indicate if that is in the areas of:

□ Education * Adult Education/Training/Employment  * Advice *providing Information

□ counselling Other

3. Do you work primarily with any vulnerable groups?

* Yes No

(If yes, please specify)

Those on a low income, older people, people in debt, people facing financial difficulties, people with disabilities and mental health issues, people on benefits

 Section 2 – Why do we need a Financial Capability in NI?

4. Does the Strategy, and supporting evidence as presented in the report “Financial Capability in Northern Ireland 2012”, adequately articulate the need for action and intervention by the Executive on financial capability?

* Yes No Don’t know

Yes, it does to some extent although we would make the following points:

  • We agree with the need to focus more on prevention and early intervention in order to reduce the general economic burden caused by low levels of financial literacy and confidence but believe there is also a need to support those already affected by poor financial decisions to help them break the cycle of debt and equip them to make better informed decisions in the future.
  • It is important to acknowledge in the Strategy that some of the impacts on financial well-being are outside the control of the individual.
  • The potential impact of Universal Credit on households and financial capability in terms of actual disposable income, ability to budget and managing very limited resources cannot be underestimated. The Northern Ireland Advice Services Consortium (NIASC) report June 2013 on ‘Why  Advice Matters’ highlights our views on this http://www.adviceni.net/publications/PDF/WhyAdviceMatters.pdf
  • Our views on single household payments and the Discretionary Support Scheme are documented in the following papers, Advice NI Briefing Paper , Welfare Reform 2012 -http://www.adviceni.net/publications/PDF/Advice%20NI%20Social%20Policy%20Briefing%20Paper%20Welfare%20Reform%20September%202012.pdf  and Social Fund Reform 2010, Discretionary Support 2012, Discretionary Support 2013 http://www.adviceni.net/publications/dsp_archive.cfm
  • There must be some reference to the role regulators and financial institutions play in ensuring people are fully informed of the consequences of their financial choices and products and that they fully understand what they are committing to, that appropriate checks and balances are in place in particular affordability checks.  The Strategy cannot be considered/developed outside the context of regulation given the increase and detrimental effect of extortionate lending practices. See  NICVA research on Expensive Lending in NI 2013 - http://www.adviceni.net/frontpage.cfm/fp_Key/178
  • Advice NI has been delivering an integrated Debt Action NI, debt advice service which supports the need for action and intervention by the Executive on financial capability. Since August 2012 we have dealt with 6257 clients with £100,812,851.55 of debt covering 17,725 debts,
  • Also, over 3,500 clients have stated that they meet at least one of the financial exclusion indicators agreed with DETI and recorded within Advice Pro, the case recording system we use. 
  • An issue that does not seem to be addressed is where the individual has no disposable income and is therefore unable to participate in financial capability. This is corroborated by financial vulnerability as highlighted in the Personal Finance section and the impact  of Welfare Reform in reducing low incomes further for example with the bedroom tax. A big question that remains is how do those who do not have enough to pay for the basics and have no disposable income participate in financial capability? These people have a lack of access to income/finances and are inevitably going to use debt advice services and will need the support once in a debt recovery process. For this reason those in debt and those in debt recovery should be considered as a target group.
  • We agree with that poverty compounds financial capability which is evidenced by the ever increasing dependency on food banks   http://policy-practice.oxfam.org.uk/publications/walking-the-breadline-the-scandal-of-food-poverty-in-21st-century-britain-292978

Section 4 – The Programme for Government

5. Is it clear how the Financial Capability Strategy relates to the wider Programme for Government?

Yes No Don’t know

 Section 5 – A Vision for NI’s Financial Capability Strategy

6.  Do you agree with the vision outlined for a NI Financial Capability Strategy? 

* Yes No Don’t know

 7. Do you agree that the new Financial Capability Strategy should be for 5 years?

*Yes No Don’t know

If no, please provide details

 Section 7 – Executive’s Priorities for Financial Capability

8.  Do you agree with the Executive’s priorities for Financial Capability?

*Yes No Don’t know

Advice NI agrees with the ‘need to  eradicate where possible any such barriers to financial inclusion in Northern Ireland if we are to improve levels of financial capability’ and suggests this is taken a step further to include monitoring and commenting on regulation and lending practices that contribute to such barriers.

We also believe the target group should include those engaging in the debt recovery process to help them from entering/re-entering a cycle of debt.

We are aware that a proportion of society fall into the ‘coping’ category and that NI homeowners will be particularly affected by any change to mortgage interest rates. This will have a significant impact on financial inclusion and levels of indebtedness in NI. Consideration needs to be given now as to how this will be managed and how all sectors work together to try to mitigate the impact and meet the needs of those most affected.

The NIASC is supported by the DSD and makes the case for access to free independent advice. With the necessary resources we could further support benefit claimants and advise customers on financial capability.

Advice NI believe that central to the success of the Strategy is the integration, alignment and promotion of support services to the public and a joined up approach between government, the community and voluntary sector and the private sector.

As an OCN, City & Guilds and Pro Qual Assessment Centre offering a mix of accredited and non-accredited training including the NVQs in Advice and Guidance and Wiseradviser (money and debt advice training supported by the Money Advice Trust) we support accredited training where appropriate. We are interested in developing and delivering the accredited training for tutors of Financial Capability and similar for training and support for those who work on a more informal mentoring basis should this become a mandatory requirement.

 Section 8 – Delivering The Vision

9. Are there any other actions the NI Executive could take to deliver their Financial Capability vision?

*Yes No Don’t know

  • Advice NI is keen to be represented on any cross-departmental working group on Financial Capability
  • The Executive should consider a co-ordinated cost effective, cross sector, cross departmental communications strategy on financial capability that incorporates details of existing services

 Impact Assessments

10. Do you have any comments on the Impact Assessments detailed on Page 48?

Yes No Don’t know

It would be useful to see the results of the Equality Impact Assessment to be able to comment on this.  

 Any other comments

11. Please detail below any other comments you may have?

Advice NI welcomes the opportunity to contribute to consultation. It is important that the high level commitment by Departments is turned into practical measures through the Action Plans and we are keen to view and comment on these. We are also keen to be involved in the monitoring and review of the Strategy and associated action plans and believe outcome based evaluation criteria should be agreed at this stage also.

In relation to the work of Advice NI and Generalist Advice Services – page 35,

Debt Action NI

An online budget tool has been developed under this project http://www.debtaction-ni.net/

Generalist Advice Services

Advice NI and our members should be included along with Citizens Advice Bureau and Law Centre NI under 6.18.

Questionnaire Complete – Thank you

Thank you for taking the time to complete the questionnaire.

Please email your response to: Financialcapability@detini.gov.uk

Or send by post to: Financial Capability Branch, Room 53, Netherleigh , Massey Avenue, Belfast BT4 2JP