Hansard

I put on record my thanks to the many organisations and people who gave evidence to the Social Justice and Social Security Committee as part of our inquiry and those who took the time to respond to the committee’s call for written views.

Hearing from representatives from local authorities, third sector organisations, tenants associations and advice services was an eye-opening experience. Charities such as Shelter Scotland, Aberlour, the Child Poverty Action Group and One Parent Families Scotland all gave evidence. That highlighted the breadth of the issue and the fact that people from all demographics and backgrounds are feeling the bite. I am sure that my committee colleagues agree that it was a stark reality check.

People were struggling before the cost of living crisis. Citizens advice bureau requests for advice on debt almost doubled from 4 per cent of total requests in May 2021 to 8 per cent in May 2022. That was before the cost of bills began to skyrocket. Now, households across Scotland face prices rising at their fastest rate for 30 years. Not being able to keep up with bills can be the trigger for a downward spiral into severe problem debt. Without significant and urgent action from the UK and Scottish Governments, bills will continue to rise and more people will be forced to take on debt just to cover their essential costs, including many who had never contemplated income insecurity before.

The people on the margins, who were just about scraping by before, are now finding that they have no space left to move. They have no financial resilience and they have no buffer to protect them against rising bills or the rising tide of poverty. Failure to act now and prevent more people from falling into debt is not only unacceptable but bad economics. We know that debt causes financial insecurity, homelessness and mental health issues, which all require state resources and intervention. To put it simply, by allowing people to fall into problem debt, the Governments are costing their future selves more money.

One money adviser told us that his advice web chat was the busiest after 10 pm. People are lying awake in the early hours of the morning, searching for help, unable to sleep because they are so worried about being unable to make ends meet. They are desperate for solutions.

In many cases, people are reaching out before they are in debt. They can feel that they are being squeezed and pushed to the edge, and they are desperately seeking a way to budget better and to cut where they can. However, the reality for too many people is that the choice is about which essential bill not to pay, because there is nothing left to cut that they have not already sacrificed.

Money advisers report that they have run out of options. They are struggling to help people to budget when outgoings such as rent, council tax, heating and electricity eat up people’s entire income streams, leaving nothing left to pay for food or essentials or to pay off debt, including credit card bills and bank loans.

One witness told the committee that

“there is no resilience. There is no disposable income anywhere. We are now relying on charities to help such people out ... I do not know how sustainable that will be for those charities.—[Official Report, Social Justice and Social Security Committee, 28 April 2022; c 3.]

As always, the third sector is stepping up in the absence of proper Government action. The demand on it is increasing, yet the SNP Government cut the overall funding to the sector by more than £1 million in its previous budget. I sincerely hope that it will choose not to repeat that mistake this year.

Money advice services are also being pushed to breaking point. They have made it clear that, the more the problem grows, the harder they are finding it to prioritise those they support.

Not that long ago, I visited a citizens advice bureau in Cambuslang that supports my constituents. I could not believe the amount of work that the bureau is having to do. The staff were rushed off their feet. I take the opportunity to thank Sharon Hampson and her team at the bureau, as well as bureau staff across the country, for their work.

Referrals to such services are increasing, yet there has been no increase in the number of staff who are available to deal with that rise. Scottish Labour has called for more funding to be directed to those services. They are the last line of defence for many people and we cannot leave them underequipped.

It is time that the Scottish Government ensured that the tools are available to allow such services to deal with rising demand and demand in the long term. It cannot allow staff to burn out.

The Scottish Government has powers to alleviate the suffering of soaring numbers of people in debt and the stress on an underresourced sector. It has a responsibility to do more to protect people, and the committee’s findings show that it has powers to act in a number of areas that would address the effects in Scotland.

In September 2019, the Minister for Business, Fair Work and Skills pledged to take forward a wide-ranging review of Scotland’s debt solutions. Almost three years later, following serious shocks to personal finances, the Government has not yet published its findings.

The Scottish Government also promised that a review of the Scottish welfare fund would commence in the first year of this session of Parliament, but we are still waiting. It must expedite that, given the current crisis.