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MPs urge government departments to adopt Standard Financial Statement

MPs are backing an early day motion calling for government departments to integrate the Standard Financial Statement (SFS) in their debt collection processes.

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The motion was tabled on Monday March 13 in the House of Commons by Yvonne Fovargue MP, chair of the APPG Debt & Personal Finance, to coincide with Credit Strategy’s upcoming Credit Week and Credit Awareness Week campaign – the latter of which is being run in association with Experian.

 

Tom Brake MP, Sir Peter Bottomley MP, Bob Blackman MP and David Lammy MP are all backing the motion.

 

The SFS, now launched, has been designed to bring greater consistency to the way organisations assess people’s finances when they are in debt. It will be adopted by all major debt advice providers across commercial and not-for-profit sectors, including Citizens Advice, Money Advice Trust and StepChange Debt Charity.

 

The MPs’ EDM says: “In view of Credit Awareness Week 2017, which runs from 27 to 31 March 2017, (the EDM) calls on government departments, local authorities and other public sector creditors to adopt the SFS for in-house debt management and collections and for operations contracted out through the government’s Debt Market Integrator programme.”

 

Kamala Panday, organiser of Credit Awareness Week, run in association with Experian, said: “We have a number of campaigns to unveil during the week which are all focused around empowering people to improve their financial futures. The EDM was aimed at gaining more awareness of the benefits of the Standard Financial Statement affordability measure, and encouraging wider support for it by both the public and private sectors.

 

“The week will also unveil the findings of a YouGov national survey of consumer understanding of credit scores where we have worked with both the Consumer Finance Association and Experian. We will also be running a campaign with Registry Trust focused on encouraging debtor rehabilitation through a new approach to dealing with CCJs”.

 

Sheila Wheeler, director of UK debt advice at the Money Advice Service (MAS), said: “A single framework will have positive benefits, ensuring a smoother transition for people between organisations and the savings category will, help people build their financial resilience as they repay their debts.”

 

Joanna Elson, chief executive of the Money Advice Trust, the charity that runs National Debtline, hopes more organisations such as local authorities, government departments and other public sector creditors will use the SFS.

 

John Fairhurst, policy and external affairs director at PayPlan, said the organisation is pleased to be one of the first involved in the important initiative.

 

Francis McGee, director of external affairs at StepChange Debt Charity, said: “Widespread recognition of this standard budget as a fair assessment of people’s situation could bring better and more consistent treatment by all kinds of creditor of people in financial difficulty.”

 

MAS has this month also launched a tool to help people on Universal Credit benefits to budget.

 

The Online Money Manager is a free, interactive tool offering personalised advice on how to budget while on Universal Credit.

 

MAS, which has worked with the Department for Work and Pensions on the tool, said this structure makes the transition much easier for claimants and means there is always an incentive to work.

 

Caroline Rookes, chief executive of MAS, said: “They will be able to find personalised information about bank accounts, help with setting up direct payments to landlords, budgeting and saving money on regular bills, as well as where to go for additional support if they are struggling with financial commitments.

 

The tool will also signpost users to further support, such as advanced payments and free debt advice.

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