Free face-to-face debt advice for people in financial crisis in Leeds is still likely to be phased out - despite a year-long reprieve for case workers whose jobs were under threat.
Bosses at the Leeds Citizens Advice Bureau fear the government wants to move all debt advice to either telephone hotlines or the internet, denying the most heavily indebted people crucial ‘human contact’ with advisers.
The government had previously planned to axe the Financial Inclusion Fund, which funded 500 debt advisors across the country, including 11 case-workers in Leeds.
But in an embarrassing u-turn, Business Secretary Vince Cable last week stumped up £27m to fund face-to-face debt advice for one more year.
The reversal came only days after the YEP revealed how more than 2,000 heavily indebted people in Leeds faced being turned away from the Leeds CAB because of the cuts.
Leeds West Labour MP Rachel Reeves said: “Week in week out at my constituency surgeries I see people who are struggling with debt from loan sharks, credit cards and catalogues.
“I’m glad that the money has been found to continue the fund, but it is disappointing that so many people had to be handed their redundancy notices.”
The decision was described as “very, welcome” by Dianne Lyons, the chief executive of Leeds CAB.
But she voiced fears that ministers still want to move a system where the financial services industry takes over the funding of a national debt advice service. She believes this would rely on telephone and internet consultations and not face-to-face advice.
Ms Lyons said: “We are talking about people who have been ill, disabled, who have had bereavement.
“Their world has been turned upside down.
“My debt advice team feel that over 90 per cent of their clients would struggle with telephone services.”