Labour Hub Editors

MSPs called on to tackle Scotland’s public debt crisis

MEMBER OF SCOTTISH PARLIAMENT

SEPTEMBER 11, 2024

The acclaimed Aberlour Children’s Charity joined with Govan Law Centre yesterday to call upon MSPs to make transformational changes to the way public debt is collected in Scotland to help end child poverty.

Both Scottish charities hosted a Scottish Parliament event that pressed MSPs to support a transformational law reform bill, which would include radical initiatives to change the way public bodies in Scotland collect debt to ensure children are not trapped in, or pushed into, poverty.

Low-income families across Scotland are facing a growing debt crisis, with public debts such as council tax arrears, rent, and school meal debts trapping them in an unbreakable cycle of poverty. Aberlour’s research and frontline experience found that 75% of the total debt supported by their Tayside Hardship Fund was to pay off debts owed to public bodies.

Aberlour and Govan Law Centre are also calling on the Scottish Government to take immediate action to reform the current public debt recovery processes, which often punish, rather than support, struggling families. 

Amongst other measures, the charities are advocating for permanent support to parents in school meal debt, as well as a unified, compassionate approach to debt management that prioritises the well-being of families and children over punitive collection practices.

The charities are saying clearly that the Scottish Government must change course from the current public debt collection approaches to ones that actively support families in overcoming financial hardship. 

Positive government intervention is essential not only to alleviate the financial strain on families but also to improve mental health, strengthen family well-being, and prevent issues such as homelessness and the potential loss of children to care systems.

“I felt like I was stuck in a hole and couldn’t get out,” said one parent supported by Aberlour. “Debt is like a shadow you can’t escape,” agreed another.

SallyAnn Kelly OBE, Chief Executive of Aberlour said: “At Aberlour, we stand at the forefront of supporting Scotland’s most disadvantaged children and families. Scotland, and indeed the entire UK, are facing a debt crisis that demands urgent and radical action. Public debt is a key factor in entrenching and increasing child poverty, and those burdened by debt need support, not punishment.

“We are delighted to be working with the Govan Law Centre to urgently call for new legislation that reforms public debt recovery processes. Government intervention is essential to relieve the crushing debt burden on disadvantaged families, enabling them to thrive. The welfare state should be a safety net, not a financial trap.

“Public bodies, including governments, should help people escape debt rather than trapping them in unsustainable and unmanageable financial situations. Positive government interventions to reduce debts not only alleviate financial strain but also enhance physical and mental well-being, strengthen family bonds, and foster inclusivity for children with disabilities.

“Governments and political parties must urgently address the policies that lead to public debt and reform current debt recovery practices to be more humane, compassionate, and sustainable.

“This session was a critical opportunity for MSPs to engage with Aberlour and the Govan Law Centre and hear first-hand from us about our experiences supporting people affected by public debt.  

“We were pleased that so many MSPs from all parties attended this important event and committed to supporting the necessary reforms to public debt recovery systems. These changes are vital to breaking the cycle of poverty and ensuring every child in Scotland has the opportunity to thrive.” 

Mike Dailly, Solicitor Advocate at Govan Law Centre said: “Govan Law Centre believes that the public debt crisis campaign with the Aberlour Children’s Charity is a vital initiative to shift the dial on child poverty. Around 240,000 children live in relative poverty in Scotland and sadly this unacceptable number has remained fairly static since 2007.

 “While the Scottish Child Payment has helped, it hasn’t lifted 100,000 children out of poverty as the Scottish Government claims. The evidence for this claim relies upon projected modelling based on a range of policy assumptions. 

 “We know that the uncoordinated and often aggressive collection of debt by public bodies can trap or push families into unnecessary poverty and misery. The obvious lever available to the Scottish Government and Parliament is to use Scottish law to create a coordinated, fairer and more intelligent system of public debt collection in Scotland.”

Key recommendations include:

• Permanent School Meal Debt Relief: Extend the Scottish Government’s one-year school meal debt write-off permanently and ensure it is implemented across the UK.
• Unified Debt Repayment System: Develop a centralised, affordable repayment method for managing multiple public sector debts to ensure deductions are manageable and fair.
• Prohibition of Aggressive Debt Collection: Prohibit aggressive debt collection practices that push families deeper into poverty, promoting compassionate and supportive approaches instead.
• Debt Amnesty Programme: Implement a comprehensive debt amnesty programme targeting low-income families, particularly for debts owed to public bodies.

For the briefing given to MSPs, see here.

Image: https://www.flickr.com/photos/144152028@N08/27813826666 Credit: stubblepatrol.com. Licence: Attribution 2.0 Generic Deed CC BY 2.0.