New strategy to help residents tackle debt

A strategy to manage and stop people from falling into debt in the borough is being brought forward by the council, to support the most vulnerable residents in the community.

Locally the council is working to reduce the impact on residents through the introduction of The Haringey Strategy for Tackling Debt, which aims to identify those residents with the most urgent need and unmanageable or ‘problem’ debt and provide them with debt management support.

This follows a decade of austerity in government funding for local authorities, a lack of pay increases and a rise in the cost of living. As a result, residents are faced with huge financial pressures, and personal and household debt is rising.

The Covid-19 pandemic has only exacerbated financial hardship across the borough, with a sharp rise in claims for universal credit, an increase in unemployment, and more requests for assistance with emergency food and fuel.

Financial and debt issues are also listed as one of the top reasons residents contact the council’s Connected Communities support service, with around 20% of calls logged over the last two years related to financial and debt support – with a further 20% about making a benefit claim.

Figures show that proportion of households in severe debt has increased from 3.4% (1,306 households) as of November 2019 to 4.6% (1,762 households) in November 2020. Data also shows that Haringey residents access less advice for debt problems face to face or by phone than in neighbouring boroughs.

In particular this new strategy outlines the key steps the council will take, working with partners, to tackle debt in Haringey:

• Support: Providing emergency help through the local welfare assistance fund and scheme and stopping the use of bailiffs for collecting Council Tax from vulnerable residents, and those on low incomes.
• Safeguarding: Recognising debt as a safeguarding issue and working with partners to raise awareness of the risks associated with problem debt and referring vulnerable people to help.
• Systems: Introducing a ‘apply once’ process for variety of benefits, support, and interventions to triage and understand individual causes of debt.
• Setting the agenda: Raising awareness of the issue of problem debt and establishing a partnership board with the aim of developing new insights and services that increase social security, financial resilience and access to the right support.

The council will work with partners to implement the strategy as it continues to understand the wider picture of support required in the borough.

Cllr Chandwani, Cabinet Member for Transformation and Public Realm Investment, said:

“We know that years of cuts, low to no pay increases and the rise in the cost of living across London has had a huge financial impact on our residents. This has been intensified by the economic impact of the Covid-19 pandemic.

“Our new debt strategy is our commitment to helping those facing the resulting crippling hardship.  We want to do all that we can to support our residents, starting with those who are most vulnerable and require urgent support. This includes our commitment to our own ethical debt reduction policy but, crucially, also demonstrates how we will work to try to help people avoid problematic debt."