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1233 Scots debt-free thanks to Debt Arrangement Scheme PDF Print E-mail
Monday, 01 February 2016

Over 1000 Scots escaped the cycle of debt in the past year thanks to Scotland’s pioneering Debt Arrangement Scheme (DAS).

During 2015, for the first time since the introduction of DAS in 2004, 1233 people completed their debt payment programmes in a single calendar year, freeing themselves from the burden of problem debt.

Over £118 million has been returned to creditors since the scheme was reformed in 2011 to allow more people access to DAS.

The success of the scheme in Scotland has prompted an influential Westminster committee to urge the UK government to extend DAS across England and Wales.

Scottish Business Minister Fergus Ewing has written to the Economic Secretary to the Treasury Harriet Baldwin pledging to assist the UK government to act upon the House of Commons Work and Pensions committee’s recommendation that DAS be rolled out UK-wide.

The committee has just published its Local Welfare Safety Net report after considering best practice local approaches from across the country and hearing evidence from respected debt, welfare and advice experts.

The report has been published to address concerns that approaches to discretionary emergency welfare assistance differ widely across the country and to recommend how the UK government can iron out “postcode lotteries” in support.

As part of its findings, the committee has recommended the government launch a consultation on Scotland’s Debt Arrangement Scheme, which freezes interest rates and charges on debts and gives debtors much-needed breathing space.

The endorsement follows evidence from Francis McGee of the StepChange Debt Charity, who told the committee the Debt Arrangement Scheme “works brilliantly well in Scotland” and recommended the government consider establishing a similar scheme in England and Wales.

DAS was launched by the Scottish Government in 2004 and is administered by Accountant in Bankruptcy.

DAS allows someone in debt to repay their debts in full through a debt payment programme (DPP). The DPP will allow a debtor to pay off their debts over an extended period of time while giving them protection from their creditors taking action against them to recover the debt in the DPP.

Mr Ewing welcomed the committee’s recognition of the benefits of DAS to people with debt issues and repeated the Scottish Government’s offer of assistance to its UK counterpart.

He said: “Scotland’s Debt Arrangement Scheme has helped thousands of people with problem debt get the time and protection from creditors they need to repay what they owe in a dignified manner.

“Over £118 million has been returned to creditors through DAS since reforms in 2011 opened the scheme up to more people who need help – demonstrating it not only helps people regain control of their finances, but is also a good deal for those owed money.

“We welcome the findings of the Work and Pensions committee and appreciate the acknowledgement that Scotland continues to lead the way when it comes to issues of personal debt management and debt relief.

“We have learned a great deal about the operation of DAS since its launch and I have written to the Economic Secretary to the Treasury indicating we are happy to help in any way we can to extend DAS to the most economically vulnerable people across the whole of the UK.”

The Work and Pensions committee recommendation comes in the wake of a similar endorsement by the Financial Inclusion Commission, which urged the UK government to adapt DAS for England and Wales in its 2015 report Improving the Financial Health of the Nation.

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