Developing a ‘Total Person’ Model for Financial Inclusion Chris Peel & Neil Stanworth

2 About A4e A company working internationally that designs, manages and delivers public services to c350,000 consumers per annum from 200 UK outlets Works for and in partnership with governments, private and voluntary sector organisations A social purpose business – combine commercial principles and social values Aims to deliver joined up and holistic services for our customers

3 A4e – financial inclusion and advice services Provision of outreach & telephone models of debt advice Social Welfare Legal Aid – tackling the consequences of financial exclusion and developing financial education programmes National provider of the Money Advice Service in England and Northern Ireland Delivery of financial education in schools, the community and prisons Embedding financial inclusion interventions into our Work Programme model

4 Current challenges – how services are provided Services commissioned in silos leading to fragmented delivery, difficult to join-up on the front line: ~ FIT debt advice ~ Legal Aid ~ Financial Capability ~ Growth Fund ~ Social Fund ~ Local Authorities and Housing Associations ~ Financial Education in schools Issues around consistent standards or measures of success Symptom focused delivery rather than tackling the root causes Not enough focus on the supply-side, ensuring access to affordable and appropriate products on scale

5 Current challenges – the help people need UK personal debt at £1.5 trillion 4.5 million adults with problem debts £181m of personal interest paid each day 1.5m people remain outside the banking system and scope of mainstream products £200 + extra costs each year for household commodities for the excluded Wider issues of deprivation both cause and result from financial exclusion: ~ unemployment/worklessness ~ eviction ~ family breakdown ~ depression and mental illness ~ poor physical health

6 The opportunity for a new response The end of the Financial Inclusion Taskforce Uncertainty about future ownership/leadership in promoting financial inclusion Significant budgetary pressures across all sectors Political will to join up services Open Public Services Increasing focus on outcomes and payment by results

7 Our Solution – Design Principles The sometimes artificial boundaries between financial inclusion, financial capability and debt advice need to be removed Preventing financial exclusion is just as important as supporting inclusion Services should tackle the multi-faceted nature of people’s problems – greater integration with other services is required Financial advice (in all its forms) should be an integral part of a wider service looking to prevent exclusion and address both its causes and symptoms

8 Our Solution – The Total Person Model The Model Tackling exclusion and deprivation through empowerment and personal ownership Providing advice and support to solve multiple issues through a single service which understands the individual and their wider circumstances Greater focus on preventing and pre-empting problems, rather than addressing the consequences of failure Sequencing of support through “triage” and prioritisation Consistent support over the longer term How Individuals supported by a single advocate/broker Existing budgets aggregated, providing a single pot to support all needs Payment linked to outcomes, both short and long term

9 The Work Programme opportunity Work Programme providers are mandated to move people into sustainable employment and away from benefits dependency We are paid out of government savings – long-term, sustainable outcomes We have freedom on how we design and deliver our services Our customer knowledge clearly indicates financial inclusion is critical to sustainable employment: - removing unmanageable debts - improving wider well-being - being able to budget a wage - protecting against consumer credit risks - affordable housing - protection and insurance Tackling financial exclusion is integral to our service

10 Making it work – Five building blocks to employment Access Outlook Skills Capacity Reliance To meaningful, sustainable jobs and services that support improving their lives Improve aspirations, motivation and insight to move forward. Includes wanting to manage their money well, access affordable products and get out of debt cycles Skills, knowledge and experience. Both for the workplace and in life – budget skills, financial capability Ability to take advantage of opportunities to work, including reducing anxiety around debt, mental health support, stable housing, access to bank account, free from legal issues etc Ability to withstand negative circumstances, including effective decision making skills around money; personalised support network; access to affordable credit and ability to manage stress

11 Collaboration, Collaboration, Collaboration We already have 60+ end-to-end subcontractors and 400 specialist intervention partners from across the public, voluntary and private sectors Our model is about joined-up delivery; we must work with other providers of front line services, allowing organisations to use our Work Programme resources and access our customers In driving sustainable employment, we hope our by-product is a legacy of sustainable financial inclusion

12 Operational and delivery issues Cost of delivery can be reduced but it must be done with care ~ Better integration of channels ~ Greater use of telephone advice alongside face to face Join up requires major operational and systems change: ~ shared infrastructure; ~ shared customers; ~ shared customer data; ~ transparent referral networks The supply-side must come to the party, with government incentives. ~ Solutions needed to provide short-term lending, affordable loans to those excluded from mainstream products; top-up savings, pre-paid cards with affordable charging rates, affordable insurance