What we do and how we do it
StepChange Debt Charity exists to tackle problem debt in the United Kingdom – and arguably this has never been needed more. According to the Financial Conduct Authority, some 7.8 million people are currently finding it a heavy burden to keep up with their bills. This unmanageable debt matters for individuals, but the impact goes much further – it damages families and communities and costs in excess of £8 billion a year.
In the year of our 30th birthday, StepChange remains the leading debt advice provider in the country. Last year more than 500,000 people came to us for help with their money worries – from support like simply writing a budget, to accessing benefits or other guidance, to the nearly 160,000 people who went through our online and telephony full regulated debt advice process.
As the country grapples with a once in a generation cost-of-living squeeze and unprecedented increases in energy bills, what we do and how we help has never been more vital.
So how do we help? We offer free, flexible debt advice that is based on a comprehensive assessment of the client’s situation. We’ll then provide practical help and support for however long it’s needed to those that wish to follow our suggestion.
This means we look at a client’s whole budget – their income, their expenditure and who they owe money to. We then support them to access the debt solution that’s right for them. That might be a repayment plan like a Debt Management Plan – and support those who can repay their debts to do so – or it could be anything from insolvency, releasing equity in a home, bankruptcy or just tightening up their budgeting. Whatever the outcome, we provide the widest range of debt solutions in the sector.
After three-years dominated by overhauling ageing front-end technology systems and the pandemic, StepChange is operating in a rapidly changing market. Consumer needs have changed, the support that creditors provide has, in many ways, never been better, the ways in which the sector is funded has changed, and new entrants to the debt advice market are evolving how clients access support. On top of this, the problems that our clients come to us with are getting more complicated and difficult to solve.
An increase in those with a ‘negative budget’ – meaning even after debt advice, they still have more going out than they have coming in – as well as an increase in the number of clients who disclose additional vulnerabilities means we must continually adapt and evolve the support we offer.
We have a strong public presence. We secure hundreds of pieces of national media coverage every month and have excellent working relationships with partners, government, and regulators. Our voice on policy issues is respected and valued. We have a real focus on good client outcomes in what are very challenging personal circumstances.
We currently employ 1200 people, headquartered in Leeds, with offices based in Glasgow, Chester Birmingham, Cardiff, Halifax, Newcastle and London.
The key functions we carry out include:
- Dealing with clients online and by phone, including providing full debt advice to those who wish to go through the detailed process,
- Implementing solutions and receiving cash from clients on an ongoing basis and remitting it on their behalf to creditors,
- Working with a multiplicity of stakeholders in finance, government and other charities.
Our supporting functions, people, finance and IT play a crucial role in everything we do.
Our Strategy
Against this backdrop, StepChange launched a new five-year strategy in March 2022. The strategy sets out a clear and ambitious, but deliverable set of priorities:
- Put clients and their needs at the heart of everything we do
- Empower our people, and further develop their skills
- Deliver value for money in a changing funding landscape
- Listen to and collaborate with our growing network of partners
- Campaign to stop people falling into problem debt, and help them recover if they do
Our Finances
We run ourselves on a not-for-profit basis, seeking to maximize the benefit we can provide within the constraints of the funding we receive.
Historically we have been funded in three main streams. By far the largest is the FairShare arrangement with creditors whereby they allow us to keep a percentage of repayments they receive through debt management plans. We also receive significant donations, mostly from banks and utility companies. Our third source has been direct government funding via the Money and Pensions Service (MAPS), the arms-length government body that oversees the debt advice landscaped England, and the devolved nations.
In February 2023, MAPS will complete its transition from grant based to commercial contract-based funding for national debt advice provision. Up to now StepChange has been funded on the grant basis to carry out these activities. Going forward we have not been awarded contractual funding, leading to a need for us to review our scope of services and how we deliver them. This has required some difficult decisions, but we already have plans in place to reduce our headcount and our cost base, whilst maintaining our overall availability of support to the marketplace. These include a major project to streamline our operational functions, including a significant technology investment.
We are fortunate to have sufficient reserves to deliver this project. We are required by the FCA and the Charity Commission to maintain minimum levels of reserves, which will continue to influence the extent of our activities.
Our Governance & Leadership
StepChange Debt Charity is the trading name of Foundation for Credit Counselling, a company limited by guarantee and a registered charity in England & Wales and in Scotland. We are regulated by the Financial Conduct Authority. We have two trading subsidiaries – Consumer Credit Counselling Service (Equity Release) Ltd is separately authorised and regulated by the Financial Conduct Authority to advise and arrange home reversion plans and mortgage contracts, and Consumer Credit Counselling Service (Voluntary Arrangements) Ltd employs Insolvency Practitioners that are licensed and authorised by the Insolvency Practitioners Association.
The charity is governed by a Board of Trustees and currently consists of eight trustees; details of our trustees can be found here. The Board is responsible for setting the group’s strategic direction, overseeing governance and risk, setting budgets, and ensuring that the charity achieves its objectives and complies with its legal and regulatory obligations. Some specific duties of the Board are delegated to the Audit & Risk Committee, and the Nomination & Remuneration Committee.
We have a strong and well-established Executive team which manages the day to day running of the charity supported in turn by a senior leadership team. Details of our Executive team can be found here. Our current CEO, Phil Andrew, is sadly leaving us in 2023 after five successful years in the role and we are currently conducting a recruitment process for his successor.
At trustee, executive and senior leadership levels, as well as throughout the organisation, colleagues are deeply passionate about what they do and the help that they deliver. During significant changes in the debt advice sector, we think that stands us in good stead for the future.
The charity’s governance framework is in alignment with the principles of the ‘Charity Governance Code for Larger Charities’. The charity is committed to maintaining the highest standards of governance and uses the code as a practical point of reference to drive a process of continual improvement built upon the code’s principles, rationales and key outcomes.
You can read more about StepChange at our website, including our latest Annual Report and Accounts, our Strategic Plan, and our Impact Report.