We are now in a position to confirm funding levels for commissioning debt advice services in England.
For the next three financial years, we have a maximum annual funding envelope of £76 million for the delivery of debt advice services in England, subject to the usual annual budget setting by government. This represents a significant increase from pre-pandemic funding levels, which totalled £43 million in 2019/20. This is also an increase in our business as usual funding for debt advice services in 2020/21 and 2021/22, excluding additional funding received in response to the pandemic.
We will allocate this funding for Lots 1, 3 and 4 as follows:
- Lot 1 (national) – £37 million
- Lot 3 (business debt) – £3 million
- Lot 4 (debt relief order (DRO) administration hubs) – £6 million.
Our rationale for allocating funding for Lots 1, 3 and 4 in this way is to maximise the number of clients advised, and maintain the viability of the contracts and lots to ensure value for money is achieved.
We previously communicated that we will not be proceeding with the current procurement of Lot 2 (regional). We can now confirm grant funding levels for regional services will be maintained at similar levels in 2022/23 to currently. Once the new contracts are in place across Lots 1, 3 and 4, our intention is to fund regional services at £30 million per annum until we conclude our work with the sector to identify the best approach and level of funding required to deliver local services.