£27m fund will replace axed debt advice services, says Vince Cable

The government has provided a lifeline of funds for free debt advice services that were looking likely to be drastically cut back. The £25m-a-year Financial Inclusion Fund was axed last week, placing in jeopardy the jobs of 500 debt advisers who provide financial assistance from citizens advice offices. At a time of rising personal insolvencies – the numbers are slightly up from 134,142 in 2009 to 135,089 last year – there have been fears that people may choose to rearrange debt repayment, possibly with loan sharks, if free advice was no longer available. Now the department for business has found a new funding stream to keep the service going, announcing they will plough £27m of funding into free debt advice over the year 2011-2012. Business secretary, Vince Cable said: "It's vitally important that everyone has access to free debt advice. I am pleased to announce that my department will provide the £27m necessary to maintain the programme of face-to-face debt advice." Cable also called on other funders to help keep Citizens Advice afloat. "While the government has maintained funding for this programme, it provides only a small part of the revenue necessary to keep Citizens Advice afloat. "I would like to take this opportunity to call on the other funding streams, such as from local authorities, to help provide whatever support they can to keep this excellent service going." The Treasury will shortly launch a free national financial advice service. The Money Advice Service provides financial advice in person, over the phone and online, and aims to increase levels of financial literacy. The service will include an annual financial healthcheck.