Alan McIntosh explores why Humza Yousaf needs to fund advice and assistance services to address the cost of living crisis.
If Humza Yousaf wants to tackle poverty he cannot be faulted on his ambition, but the Scottish Government is going to need a joined up and inclusive strategy to do it. There are certainly easier challenges he might have picked in his first Programme for Government, especially during a cost of living crisis. Poverty is a complex problem and its impact is multi-faceted, from food and fuel poverty to low-income life, from poor performance in schools and poor diets to a higher proportion of those in poverty being affected by disabilities, addiction, and inadequate housing.
It certainly feels like Yousaf may be inadvertently setting up a multitude of metrics that in years to come his opponents will hold him up against to say that he is failing. This is especially true given current economic conditions. Thirty years of historical statistics on matters such as repossessions, bankruptcies, evictions, sheriff officer and court related debt actions, all show increases for at least three or four years after an economic crisis. Whether it’s the early 1990s or the post credit-crunch years, stats all show the same thing: a bell curve that rises after the initial crisis occurs and continues to grow for several years, before beginning to subside. There is no reason to believe the current cost of living crisis will not similarly plunge tens of thousands of people into economic distress as the ‘new poor’.
However, there is hope for Yousaf. The speed with which that bell curve rises, and the period it spans, depend on several factors, and not all of them are about giving people more money (although that helps). There are two factors that are to his advantage. First, in the areas of bankruptcy, repossession, eviction and debt areas, the relevant laws are devolved to the Scottish Parliament, so many of the solutions that would give Scots increased protections can be granted in Holyrood and not Westminster.
Another factor is the potential for advice and assistance to help mitigate the worst effects of many of these crises, while also generating financial gains for clients. Evidence from 2021/22 shows that every £1 invested in local advice agencies results in £11 in more social security benefits and written-off debt. Important figures like these have to be considered when you have limited funding available to invest in anti-poverty initiatives. Local advice can also help to reduce the number of people presenting as homeless, requiring emergency help in the form of crisis grants, food bank and fuel bank vouchers, or even turning to their GPs for help with poverty related health issues. Although much impaired since the post credit-crunch years, Scotland still has an extensive network of local authority advice services, Citizen Advice Bureaux, local independent advice agencies and law centres where people can turn for advice regarding money, benefits, and housing. The problem, however, is that Scotland doesn’t really have a joined-up strategy for delivering this type of advice. There are two main large funding
providers, in the shape of the Scottish Government and local government, but no integrated system that avoids duplication or waste. Also, the Scottish Government prefers to fund big national charities that tend only to provide advice rather than assistance such as helping people to fill forms or negotiate with creditors. This often means people have to be referred on to local advice agencies and other local services, who do much of the work that generates the financial gains for clients. The Scottish Government also tends to fund third sector providers without having any regard to what services are already being provided by local authorities, and what other services already exist in localities.
By far the largest funders of advice in Scotland are local authorities, and therefore most of the advice in Scotland is provided by them or their delivery partners. In 2021/22, for example, the Improvement Service reported local authorities spending £24.8 million on local money and benefit advice, with £13 million being provided to internal services and £11.8 million being spent on external services. The Scottish Government, in contrast, reportedly invested only £11.7 million in 2023/24 in funding money and benefit advice services.
If the Scottish Government is serious about targeting poverty, it will need a joined-up strategy that involves both the public and third sector. It makes no sense to pursue a funding strategy, especially in relation to advice, that does not involve discussions with local authorities to ensure that everyone who wants advice can access it locally if they require it.
There can be no doubt about the scale of the task that Humza Yousaf has set himself. Tackling poverty is a huge challenge at any time, and he will be trying to do so at a time when the wind will be in his face. However, a joined-up advice-first strategy, utilising all the powers of the Scottish Parliament, may put the wind at his back and get him part of the way there.
Alan McIntosh is an Approved Money Adviser and blogs at www.advicescotland.com.