Statutory debt solutions and due diligence in Scotland – response to policy review: consultation

1. Ministerial foreword

Countries around the world have faced unprecedented challenges and pressure on their economies in recent times, and Scotland has not been immune to this. The COVID-19[feminine] The pandemic has introduced huge uncertainty – with a huge impact on business and employment arrangements for thousands of people in Scotland. We are now in the midst of a cost of living crisis, exacerbated by pandemic-related uncertainty and placing many households in dire financial straits. Unfortunately, for many, unsustainable debt will be the unfortunate consequence.

It is therefore essential that we seek to maximize the effectiveness of our systems which provide the protection and support needed to help people get out of the pressure of problematic debt. We have good mechanisms in Scotland – with far-sighted reforms introduced in 2015 putting high-quality consumer debt advice at the center of the system. The Debt Arrangement Scheme was a great success and remains the UKthe only statutory debt repayment solution – reforms introduced immediately before the pandemic began allowed the scheme to scale, allowing more people to take control of their debt through a manageable payment schedule.

It is important that we continue to build on our current debt solutions and I am therefore grateful to the many professionals who have given their time and commitment to help the Scottish Government review our solutions and mechanisms to ensure they are fit for purpose. They worked together to come up with a number of recommendations that drew on a wide range of evidence, including case studies and statistics, with the aim of building on the improvements we introduced in response to the pandemic.

The information in this consultation provides the Scottish Government’s response to the recommendations put forward and outlines the work that will be undertaken as a result. I encourage anyone interested in our debt management solutions and debt collection mechanisms to provide us with feedback on these proposals. My intention is that these proposals will be considered either for inclusion in a future Bill before the Scottish Parliament or for implementation through secondary legislation or administrative action as appropriate.

We look forward to hearing your views on this consultation and thank you for taking the time to contribute.

Thomas Arthur MSP
Minister of Public Finance, Planning and Community Wealth