Debt Arrangement Scheme: Returning Funds to the Free Advice Sector

Between 28 May 2019 and 20 August 2019, the Scottish Government consulted on how funds generated from Accountant in Bankruptcy (AiB’s) proposed payments distribution (PD) service in the Debt Arrangement Scheme (DAS) may be returned to public sector advice organisations.   This was a result of responses to the previous consultation   "Building a better Debt Arrangement Scheme" indicating their support of the proposal for AiB to offer a PD service to enhance the resilience of process, and confirmation from AiB that it would only seek to cover costs in the process and reinvest any excess funds to free to client advice sector.  In total 19 responses were received.

The responses to the consultation did not indicate a clear consensus.  Option 1, where residual funds generated by AiB’s payments distribution would be allocated to the originating advice organisation, and Option 5, which suggested these funds would be remitted to the Scottish Government to help fund general money advice provision, were the most favoured options.      

In light of the lack of clear consensus, it was decided that the best approach to adopt was to allow organisations to choose between options 1 and 5. This approach allows individual organisations who wish the funds generated by their DAS caseloads to be returned directly to them, to choose this option. Those who do not wish to adopt this approach can elect to have the funds generated from their cases to be remitted to the Scottish Government to augment the funding of money advice in Scotland across the public sector and third sector.