Funding and operating models of the debt advice sector

The report has a particular focus on the provision market, the operating models providers adopt and how these providers are funded.

Effective commissioning requires an in depth understanding of the landscape and market for the desired services and the potential suppliers who may be able to provide these services. MaPS has a duty to provide debt advice in England and to commission effective services that meet the needs of people in vulnerable circumstances in a cost effective manner.

This report is designed to support MaPS’s decision making for future rounds of debt advice commissioning. It sets out key themes and challenges facing debt advice providers and suggests some areas of consideration to prompt debate and discussion ahead of the any commercial activity.

The report explores insight, learning and considerations across four themes: 

Theme 1: Funding sources and pressures on funding for debt advice

It does not consider the sufficiency of debt advice funding or making judgements about who should be funding. Rather it aims to understand what pressures the sector’s funding is under and how this informs provision. 

Theme 2: Lack of consistent operating models across the sector to base a service offer against

What are the different operating models in existence, how do they offer value to different sets of clients. What opportunities and challenges does this present for supporting clients 

Theme 3: Client needs do not always align with a narrow interpretation of debt advice

How well understood is MaPS’ role and its current strategy for funding debt advice 

Theme 4: The approach used in the commissioning exercised launched in Summer 2021 was not closely aligned with the current capabilities and priorities in the debt advice sector

What are the opportunities that might be a closer fit to the current sector landscape and how could approaches drive improvement and sector development. 

This report was written primarily for MaPS and has informed the development of the ‘Consultation on MaPS proposals for the delivery of its debt advice strategy’ published January 2024. 

The report may also be of interest to: 

• Funders of debt and other advice services 
• Debt advice providers 
• Creditors and other organisations referring people into debt advice services 

The report and supporting research activity was undertaken by The 4OC and commissioned by the Money and Pensions Service.