Chamber and committees

The Scottish Government recognises that there are some alternatives to the high interest credit such as those provided by credit unions, and will do all it can to promote these, where this is appropriate.

Therefore, we will continue to work with representatives of credit unions to ensure that we are doing all we can to support and promote them in this area.

As part of the wider third sector, credit unions will be eligible to apply to any future third sector organisational development funds when these become available.

I am keen to keep momentum and will continue to work with officials and stakeholders to look into these important issues and the possible solutions. Following the roundtable event on high interest credit, a number of steps were agreed for how we will engage on the issues of high interest credit going forward. These steps include:

The high interest sector’s main bodies will introduce a Good Practice Customer Charter 26 November 2012. I intend to write to all the payday lending firms in Scotland that we know of to encourage them to comply with this charter.

StepChange Debt Charity (SCDC) believes that there are issues which are going to have an impact on personal finances going forward. I have asked for a letter from SCDC detailing their concerns and, if appropriate, I will write to Lord Freud, Parliamentary Under Secretary of State (Minister for Welfare Reform).

It was also suggested that the benefits of saving with credit unions may be promoted to young people through ‘Young Scot’. I have asked officials to engage with ‘Young Scot’ to discuss this proposal further.

Bristol University is investigating the high interest market along with the Office of Fair Trading. I have asked officials to meet with the researchers to ascertain whether there is anything specifically the Scottish Government can do to assist this research.

As stakeholder engagement on these issues is vital, I have requested that a larger stakeholder event be organised for spring 2013.

I can confirm that on 09 November 2012 I met with a number of stakeholders, including a representative from Association of British Credit Unions Ltd (ABCUL), to discuss high interest credit, particularly pay day loans. The attendees were as follows:

Yvonne McDermid, Money Advice Scotland

Frank McKillop, Association of British Credit Unions Ltd

Susan McPhee, Citizen’s Advice Scotland

Jason Wassell, Consumer Finance Association

Joe Surtees, StepChange Debt Charity (formerly Consumer Credit Counselling Service)

Scottish Government:

Fiona Malcolm, Third Sector Unit

Sharon Bell, AiB

John McGowan, AiB

I am keen to engage with stakeholders further to discuss these issues and further roundtable events are currently being set up.

Although no dates are confirmed at present, officials at Accountant in Bankruptcy will contact stakeholders in the near future to advise them of the dates of these meetings.

The Scottish Government is considering options for further funding support for third sector organisational development. Announcements about any future programmes will be made in due course.

The remit of the roundtable stakeholder event on 09 November 2012 was to discuss what action can be taken by the Scottish Government to assist those who are suffering from financial difficulty due, in whole or part, to high interest credit, particularly pay day loans.

A number of issues relating to high interest credit were discussed including the publication of Citizen’s Advice Scotland’s report on high interest credit, alternatives to high interest loans, capping the cost of credit and the implementation of a good practice customer charter by the high interest sector’s main trade bodies.

Since 2008 we have allocated £31.8 million to the Scottish Investment Fund, this will all be spent by 31 March 2013. There are currently no plans to commit further spending to the fund.

In 2011, we launched the Just Enterprise business support programme. We awarded a £3 million contract to a third sector consortium to deliver the programme until March 2014.

In 2011, we allocated £6 million to the Enterprise Growth Fund. All of the funding has been spent. We are currently considering options for committing further funding to support third sector organisational development.

This stakeholder group was established by the Scottish Government to provide input, advice and expertise on the related subjects of financial inclusion, financial capability, personal budgeting support, financial product development, payment exceptions, digital access and digital participation in relation to welfare reform.

Membership is drawn from bodies with an interest in these subjects, and in implementation of universal credit in Scotland. This includes the Department for Work and Pensions, COSLA and individual local authorities, government agencies including Accountant in Bankruptcy and Education Scotland, advice services including Citizens Advice Scotland, financial service providers including credit unions, disability rights groups and the social housing sector. The group draws together a broad range of interests to ensure a common understanding of the issues, and provide a forum for sharing best practice and innovative approaches across sectoral boundaries.

Organisations represented at the meeting on 26 October were: 1st Alliance Ayrshire Credit Union; Accountant in Bankruptcy; The Action Group; Capability Scotland; Child Poverty Action Group; Citizens Advice Scotland; Dumfries & Galloway Council; Department for Work and Pensions; City of Edinburgh Council; Greater Easterhouse Money Advice Project; Glasgow City Council; Glasgow Housing Association; Money Advice Scotland; Money Advice Service; North Ayrshire Council; North Lanarkshire Council; One Parent Families Scotland; Rights Advice Scotland; Royal National Institute for the Blind; Scottish Federation of Housing Associations; Scottish Government; West Dunbartonshire Council; and Young Scot.

The group will next meet on 13 December 2012 in Edinburgh.

The Scottish Government considers that parents play a vital role in supporting their children’s early learning and education. We are investing £1 million per year until 2014-15 in our highly successful PlayTalkRead campaign which aims to encourage parents and carers to play, talk and read more with their babies and young children to help drive home the importance of positive interaction with their children from day one.

In addition, our investment of over £1.5 million in 2012/13 in the early years book gifting programme (Bookbug) means that the Scottish book trust provides a range of free book packs for every child in Scotland from birth to Primary one.

Also, in March 2012, Education Scotland published the resource Every Day’s a Learning Day which is targeted at parents of young children between the ages of birth to two and three to five. The book’s aim is to aid parents and practitioners in learning with young children at home.

The Scottish Government’s approach is to tackle the long term drivers of poverty through early intervention and prevention. The solidarity target reflects the importance we attach to reducing income inequality and we are therefore strongly committed to the current income based measures of poverty. That said we welcome all moves to improve our understanding of this complex issue and especially how we might best tackle it through the Child Poverty Strategy for Scotland.