Norwich Liberal Democrats Online

Lib Dems highlight growing debt crisis

At a full council meeting next week Norwich Liberal Democrats will highlight the growing debt crisis in the city and call for action from the government and the Labour run City Council.

Recent reports have revealed that families in Norwich are in the frontline of the credit crunch and the growing economic turmoil. Norwich Citizens Advice Bureau has seen a 36% rise in debt cases; house repossession rates in the city are up 131%, and the loanshark and 'payday loans' markets are growing rapidly in the region.

Brian Watkins, Leader of the Liberal Democrats on Norwich City Council, commented:

"It has become increasingly clear in recent months that the rising cost of living is causing real hardship for families across the city. More and more people are struggling to get through the month coping with mortgage repayments, utility bills and the rising cost of food. Many are getting dragged into real financial problems and debt. In this tough climate it is vital that people are able to access free, local and impartial financial and debt advice."

The Lib Dem group will ask the government to conduct a review of debt advice in the city and seek assurances over the future funding of the Norwich Citizens Advice Bureau. Last month, the Norwich Evening News reported that funding for the CAB may be threatened by the government's new 'one stop centres' or Community Legal Advice Centres (CLACs). It was revealed that CABs in Leicester and Hull had already lost their funding.

"The CAB does brilliant work in the city and is at the frontline of helping people with debt problems. We need to ensure its future funding is secure and that any new government 'one stop shops' complement the work being done by the CAB. The last thing the CAB needs is doubts over its funding and the possibility of a lengthy and difficult funding application." said Brian Watkins

The group will also ask the council to investigate whether it could strengthen its own support for the CAB and will ask the Council's Scrutiny Committee to conduct a review into debt advice in the city.

Notes:

1. The Liberal Democrat Group will move the following motion at a full meeting of Norwich City Council next Tuesday at 7:30pm in City Hall:

''That Council notes:

The growing economic crisis and the impact it is having on individuals in the city;

The increasing number of people struggling with mortgage repayments and the record levels of personal debt;

The increasing demand for local debt advice demonstrated by Norwich Citizens Advice Bureau, reporting a rise of 36% in debt related cases last year and the fact that local residents may wait up to 5 weeks for an appointment with free, independent debt advisers in the city;

That planned changes in funding for advice services nationally may see the CAB service forced to bid against major national organisations to secure funding from 2011, and potentially stripped of funding.

Council resolves to:

(1) Write to the Chancellor of the Exchequer to:

(a) request that the Government reviews the adequacy of the current provision of free, impartial debt advice services in the City;

(b) seek clarification that any new government 'one stop centres' or Community Legal Advice Centres (CLACs) should not take funding away from the Norwich CAB and any new services should complement the City's existing services.

(2) Ask the Scrutiny Committee to work with relevant local public and voluntary sector bodies to undertake a review of current debt advisory service provision in Norwich.

(3) Ask the Executive to review the support that the City Council offers the CAB and similar services and consider whether this support could be extended.'

2. More information on the Norwich CAB funding situation can be found here: http://www.eveningnews24.co.uk/search/story.aspx?brand=ENOnline&category=News&itemid=NOED28%20Aug%202008%2016:52:21:893&tBrand=ENOnline&tCategory=search

3. Reports in recent months have revealed:

Repossession rates are at their highest since 1990 up 131% in Norwich over the last year.

An increasing demand for local debt advice demonstrated by Norwich Citizens Advice Bureau reporting a rise of 36% in debt related cases last year and average debts of those seeking help has also more than doubled from £15,000 to £35,000.

Local residents face a wait of up to 5 weeks for an appointment with free, independent debt advisers in the city.

That only an estimated 5% of those in debt in the region are accessing these services.

Many instead are turning to loansharks and between August 2007 and June 2008 the number of 'payday loans' grew by more than 130%. A market leading company currently charges a typical annual percentage rate (APR) of 1845% on these loans.