Debts & Loans

The recession has also meant that the CAB has seen a 22 per cent rise in the number of cases involving bankruptcy between April and September. There was a 69 per cent increase in redundancy cases and a 28 per cent rise in Jobseekers Allowance problems. Last year CABs handled 1.737 million debt cases - a third of their entire annual caseload.

The new figures, showing a "significant rise" in demand, have been passed by the CAB to the Conservatives who are today calling for the suspension of a new government-imposed funding scheme which has threatened the existence of many of the bureaus.

The government is setting up a network of up to 75 Community Legal Advice Centres (CLACs) to create a 'one-stop-shop' for legal advice with the new service provided by whoever wins a complex tendering process. Five are already in existence with a further eight planned this year.

The roll-out of CLACs, jointly funded by the Legal Services Commission and local councils, is forcing local CABs to compete to win contracts. One bureau in Hull has already been forced to cut back its services and axe half of its 55 staff after it lost a £700,000 contract for legal services.

The Access to Justice Alliance – a coalition of groups including Age Concern, the Child Poverty Action Group, the Legal Action Group, Liberty and Shelter – called the threat to Hull's CAB a "wake-up call".

The National Association of CABs, has expressed "serious concerns about the implementation of the … policy in the current economic climate". The association, which has warned of closures, has said that "… the policy is having a detrimental impact on the CAB service at a time when Government should be supporting advice networks to help people weather the recession".

The Conservatives are today tabling a Commons motion calling for a suspension of the tendering process while the economy is in recession.

Nick Herbert, the Shadow Justice Secretary, said: "Citizens Advice Bureaus play a vital role in offering free and independent advice to people in need, and the last thing the Government should be doing in a downturn is jeopardise them unnecessarily

"Over the coming year, many more people may unfortunately need financial advice and support from staff and volunteers in CABs. The effect of the tendering process on the voluntary sector needs to be reviewed and a new public interest test considered.

"The Government should suspend tendering for legal advice services pending the outcome of their own review, and while the economy is in recession, so that we can be sure that more CABs will not be undermined.

"Since the onset of the recession, CABs throughout England and Wales have been busier than ever, with growing waiting lists of debt problems and people worried about losing their homes."



The first CAB was set up in 1939 and will celebrate its 70th anniversary in September. They are one of the largest voluntary organisations in the country with 26,000 staff, of whom 20,000 are volunteers.