Weekly Blog by Philip King, CEO of the ICM - 'A journey into the unknown'

I seem to have been reading and reviewing an endless stream of lengthy reports and consultation documents recently, including the 150 page Ministry of Justice 'Transforming Bailiff Action' consultation over the past weekend, but more of that later (and please respond when the Institute issues its consultation survey questionnaire in the not too distant future). Some of the documents have been more interesting than others but let me mention two reports relating to consumer debt and advice.

The first is 'Debt Advice in the UK', the final report produced by London Economics for the Money Advice Service. The Money Advice Service, which was initially set up by the Government, is funded by a charge levied on the financial services industry and collected by the Financial Services Authority. It replaced the Consumer Financial Education Body in April last year. In 2012/13 the Service will use a budget of £46.3 million to deliver against its money advice targets, and a separate budget of £40.5m to coordinate the delivery of debt advice across the UK. Credit professionals working in the sector will be keen to see that the financial services industry's levies are put to good use!

The report concludes that 'Overall, the desk review of the existing literature and information on the debt advice sector and the consultations with stakeholders show that, while there exists a fair body of material on individual debt advice providers or programmes, very few analyses take a more holistic approach, covering the debt advice sector as a whole or, at least, large segments of it. Notable information gaps relate to: estimates of the actual and total demand for debt advice; the volume of debt advice provision by form and channel for the sector as a whole; the needs of actual and potential debt advice seekers; and the comparative effectiveness in the short and longer run of the different forms and channels of debt advice provision.'

I may be being cynical here, but to my simple mind it seems that the report tells us more about what it can't tell us than about what it can!

The second is the 'Consumer Debt and Money Report' launched by the Consumer Credit Counselling Service as the first in a series of quarterly reports based on research carried out by Cebr. This reveals: that households are spending 24 percent of their discretionary income - £199 per month - on interest payments; that the demand for debt advice is forecast to remain high and peak in 2014 as unemployment rises across the UK; and that middle-aged and older people will be increasingly affected by debt problems severe enough for them to need to seek help, highlighting the challenging financial situation that older households face. The report predicts that CCCS's share of clients over the age of 45 will rise from a historic 28 percent in January 2005 to a projected 47.6 percent by December 2014.

I was privileged to chair the ICM's Credit Industry Think Tank last week - it's always great hearing the views of leading experts from across our industry - and, during the forum, we were reminded that personal insolvencies are falling, with 2011's figure of c120,000 representing a fall of about 15,000 over 2010. Good news perhaps, but let's bear one thing in mind: no numbers are collected for debt management plants arranged through the advice sector and these do not appear in the official published insolvency figures (another piece of missing but vital data!).

I hope at least some of the Money Advice Service's £86.8m will be used to identify the real size of the problem and the effectiveness of solutions. Without knowing where we are, it's hard to plan the route to a better place!

Weekly Blog by Philip King, CEO of the ICM - 'Stating the obvious'

The Tribunals, Courts and Enforcement Act 2007 contained provisions for the regulation of bailiffs and followed a White Paper published in 2003. Since then, I have been to numerous meetings to discuss the issue and the Ministry of Justice has been repeatedly promising a consultation on detailed proposals for a new regulatory regime. When Justice Minister Jonathan Djanogly announced this week the release of updated 'National Standards for Enforcement Agents', he also promised that the Standards are 'the first step towards tackling this issue (unscrupulous bailiffs), which will be followed shortly by proposals for a new regulatory regime.' I'm heartened that at last something seems to be happening but, although I understand the consultation is expected in Spring, I'm always nervous when I see the use of words like 'shortly'. I remember the importance of SMART objectives being used in business and I sometimes wish the public sector would apply the principles by putting a specific and measurable date on actions rather than using vague descriptors like 'soon' and 'shortly'.

Anyway, back to the updated Standards. They can be found here but don't expect to be overwhelmed by their content. Creditors' responsibilities include, among other things, that they should be aware of their own responsibilities, must not seek payment in order to secure a contract, must notify the enforcement agent if the debtor pays or contacts them, and must forewarn the debtor of impending enforcement action. The section 'Professionalism and conduct of the enforcement agent' says they must act within the law at all times, must not be deceitful by misrepresentation, must not act in a threatening manner, should always produce relevant identification, must not discriminate, and a few other similar instructions.

In short, there is little in the Standards that any credit professional or enforcement agent couldn't have written on the back of an envelope if asked to suggest what they should be. As the document says, they are not legally binding, but offered as a 'helpful tool for the industry and for creditors.' As Colin Naylor, Co-Chairman of CIVEA (the Civil Enforcement Association) points out: "these are the Industry's own standards......all the signatories are already committed to the practices and standards contained in the document........and most CIVEA members already publish similar creeds of professional behaviour."

So will they have any effect on 'unscrupulous' bailiffs? I think not, and I wish the time and effort in producing them had been spent on drafting the long-promised proposals for a new regulatory regime so that the consultation can get under way and we can see some real progress.