Is Minister receiving good Information on Common Financial Tool?

Is Minister receiving good Information on Common Financial Tool?

As welcome as the announcement is that Jamie Hepburn is suspending plans to immediately introduce the Standard Financial Statement, questions now need to be asked, has the Minister been receiving the best information on the policy? The Common Financial Tool (Scotland) Regulations have now been laid twice in front of the Scottish Parliament and withdrawn twice by the Minister.

They propose changing the tool that determines how much people pay in a bankruptcy or a Protected Trust Deed in Scotland. The current tool is the Common Financial Statement with the regulations proposing the Standard Financial Statement should be adopted.

After considering extensive evidence from the money advice sector and personal insolvency industry and taking oral evidence from the Minister himself and his senior Civil Servants, the Economy, Energy and Fair Work Committee unanimously recommended against the introduction of the Standard Financial Statement at this point (for information on the concerns raised see here; for information on the evidence laid, see here).

Instead the Committee recommended:

  • Examination of how the administrative burden created by the Common Financial Tool on advice workers can be reduced;
  • Research into how the Common Financial Tool impacts on consumers; and
  • Further research into what constitutes a reasonable standard of living.

In agreeing to not relay the draft regulations at this point, the Minister has indicated that he is not prepared to accept all the recommendations of the committee; and has also indicated that even if the research carried out results in a conclusion that fundamental reform is required, this is unlikely to be possible due to the fact it is highly likely changes to primary legislation will be required.

The Ministers letter can be read here.

Is Jamie Hepburn getting Good Information on the Common Financial Tool?

However, throughout the lengthy process these draft legislation have been through, concerns have been raised in relation to statements the Minister has made to the Economy, Energy and Fair Work Committee, which suggests he may not be receiving the best information.

For example, when the original regulations were laid in June 2018 and then withdrawn in September 2018, he stated in his letter:

“Since laying the Regulations, the Accountant in Bankruptcy has received representations from some advice sector organisations seeking a longer lead in time before commencement of the revised regulations. In particular, they have highlighted delays in the development of IT Systems incorporating the revised common financial tool and suitable provisions for staff training. Other than timing issues, there has been no other fundamental concerns raised by these organisations about the regulations.”
Jamie Hepburn, Minister for Business, Fair Work and Skills, 10th August 2018

This statement about no fundamental concerns being raised came as quite a surprise in the money advice sector, as it was clear there were many fundamental concerns, in addition to that of timing, that had come out during an earlier consultation the Accountant in Bankruptcy had run on the draft regulations, the regular meetings of the Common Financial Tool Working Group and even in the submissions that were made to the Committee before the Regulations were withdrawn.

Again after the draft regulations were withdrawn for the second time, concerns again were raised with further statements from the Minister in his letter to the Committee:

“I should say at the outset I have some concerns that the evidence you have received at these sessions does not represent the full array of opinion on the effects of the regulations. I recognise that inevitably there will be differing views on any legislative provision, either in primary or secondary legislation, but believe it is important that the Committee is provided with a full picture of the issues relating to this instrument. I do not believe that evidence you have been presented with to date is representative of the majority of the sector’s views
Jamie Hepburn, Minister for Business, Fair Work and Skills 9th November 2018, withdrawing the draft regulations a second time.

This statement, suggesting the Committee had not been presented with the full picture was strange, as already evidence had been provided in writing by:

  • Money Advice Scotland
  • The Institute of Chartered Accountants of Scotland
  • The Money Advice Service
  • Association of Business Recovery Professionals
  • Stepchange
  • Citizen Advice Scotland
  • The Accountant in Bankruptcy
  • Chartered Institute of Credit Management
  • Falkirk Council

In addition to that the Committee had already taken evidence orally from:

  • Money Advice Scotland
  • The Institute of Chartered Accountants of Scotland
  • The Money Advice Service
  • Association of Business Recovery Professionals
  • Inverclyde Council
  • Aberdeen Council
  • East Renfrewshire Council
  • WRI Associates (Insolvency Practitioners)

Finally, concerns have arisen again with the letter sent to the Committee from the Minister stating he was suspending plans to immediately reintroduce the regulations:

“Second, the need for a more fundamental re-examination of the way in which debtor contributions are calculated beyond the simple question of which mechanism we should use for the Common Financial Tool currently built into legislation. The Committee suggests we could conduct such a review within what is in effect the first half of the new financial year with the hope that this could lead to consideration of a different approach to be introduced from 1 April 2020. We have already committed ourselves to undertaking such a review as part of the wider review of the 2015 legislation due to start shortly, and likely to take most of the summer. But I would not want to mislead the Committee over the likely time necessary to implement any fundamental change of approach coming from that review. This would be highly likely to require primary legislation – and there is no prospect of further primary legislation in this area that would be effective from April 2020.
Jamie Hepburn, Minister for Business, Fair Work and Skills 15th November 2019,

What is of concern about this statement is if research does suggest more fundamental reform is required to how debtor contributions are calculated, rather than it being “highly likely” that primary legislation will be required, the contrary is true, with it being highly unlikely primary legislation would be required.

For example, looking at the current primary legislation, the Bankruptcy (Scotland) Act 2016, which allows the Minister to make the regulations, the relevant provisions are drafted in such a way that they provide the Minister with a wide power to use the regulations as a vehicle for delivering any model of calculating contributions for debtors.

Inevitably, questions need to be asked, where is the Minister getting his information? It repeatedly seems to be off-mark and poorly informed.

The message also seems to be is although the Minister won’t lay the Regulations again at present, as he knows the Committee would reject them; neither is he willing to allow any new regulations to be informed by the outcome of any research, unless that outcome recommends the adoption of the Standard Financial Statement. It seems likely the Regulations will not even be delayed until the outcome of the research is known.

All of which suggests another show down with the Minister, the Committee and front line advisers again in the autumn.

Section 89: Assessment of debtor’s contribution

(1) The Scottish Ministers may by regulations specify a method (the “common financial tool”) to be used to assess an appropriate amount of a living debtor’s income (the “debtor’s contribution”) to be paid to a trustee after the sequestration of the debtor’s estate.

(2) Regulations under subsection

(1) may in particular prescribe—

(a) a method for assessing a debtor’s financial circumstances (including the debtor’s assets, income, liabilities and expenditure),

(b) a method for determining a reasonable amount of expenditure for a debtor after the sequestration of the debtor’s estate,

(c) the proportion of a debtor’s income that is to constitute the debtor’s contribution,

(d) that a method determined by another person must be used (with or without modification in accordance with regulations made under subsection (1)) as the common financial tool.

Sheriff Decision Throws Light On Effects of Time Orders

Sheriff Decision Throws Light On Effects of Time Orders



Time Orders are a subject I have touched on and returned to on several occasions in this blog over the last year.

In relation to Hire-Purchase agreements for cars and Conditional Sale and Personal Contract Purchase Plans (PCP), Time Orders allow Courts to give consumers time to pay their agreements where they have went into arrears or defaulted on them, whilst also allowing them to retain possession and use of the vehicles.

The question I have been seeking an answer to is what are the effects of Time Orders once granted?

They have not been easy answers to find.

However, in an unreported decision delivered on the 7th February 2019, Sheriff McIntyre in Greenock Sheriff Court has finally provided an answer to one question I have been asking: what happens when a Time Order is granted?

In a case that involved an action for the repossession of a car, that was subject to a Personal Contract Purchase Plan (which for all legal purposes is a Hire-Purchase Agreement regulated by the Consumer Credit Act 1974), Sheriff McIntyre held that a Time Order varies the terms of a regulated agreement and allows the payments to be repaid in a regulated manner.

He also held that it was possible to argue for the action for payment of money and repossession of the car to be dismissed on the awarding of the Time Order, or for it to be continued or sisted (suspended) to monitor the repayments of the agreement.

The case involved was eventually sisted, as it was felt this was fairer to both parties, as it allowed the creditor to bring the case back into court quickly should the consumer default on the agreed repayments again,

Sheriff McIntyre also held that unlike Time to Payment Directions, which are awarded under the Debtors (Scotland) Act 1987 and result in a decree being granted, a Time Order allows the consumer to retain possession and use of the car.

What are the other effects of Time Orders?

Although the case does not definitively answer other questions I have raised in recent months, it may be possible from Sheriff McIntyre’s reasoning to extrapolate some additional understanding of what the effects of a Time Order may be.

If it varies the agreement, is it unreasonable to assume, depending on how the Time Order is framed, that it may do so to allow the consumer time to remedy their default of the agreement; or, to amend certain provisions of the agreement for the remaining duration of the agreement?

So, for example, where the consumer has arrears of £1,000, a Time Order may allow for those arrears to be repaid at £100 per month, in addition to the contractual payments; or for example, it may reschedule how the full amount owing under an agreement is repaid, changing the contractual payment amounts, the interest rates and ultimately the terms of the agreement? It is clear the court has wide discretion in how it grants a Time Order.

In such cases, where the Time Order is just for the arrears, once these are cleared, providing the issue of legal expenses are addressed, could it be argued that the action should be dismissed? Has the consumer not remedied their default and brought the agreement back into good order? Or likewise, where it varies the terms in which the full amount should be repaid, in effect varying the existing agreement, then after a period of court supervision, should the court not consider dismissing the action and allow the new varied agreement to continue as if there had been no default?

This is important as it may answer another question in relation to Time Orders which I have asked (Time Orders: Has Their Time Come?), and that is if they can remedy a default on an agreement, should any termination of the agreement by the lender, not be reversed? This may then allow the consumer to enjoy again the full contractual and statutory rights that accompanied their existing agreement, including the right to terminate the agreement themselves. The logic being as the lenders right to terminate the agreement arises from the debtor being in default, where the default is reversed, so should, where possible, all the consequences of that default?

This is important for the purposes of s99 and S100 of the 1974 Act, which respectively allows a consumer to terminate an agreement after half the amount owing has been paid and limits the borrower’s liability to that amount (subject to certain caveats).

This is important in a consumer finance market where car finance is now believed to be responsible for 90% of all new car purchases and where car debt is on the rise. It is even more important when you consider one of the reasons for this rise, is falling monthly instalments, driven by optional balloon payments at the end of the agreement, which are no longer optional once an agreement is in default or a decree has been granted.

These are still questions that need to be answered.

Either, way, it would appear, from Sheriff McIntyre’s reasoning, the action that is raised in court should not result in decree once a Time Order is granted and its terms are being complied with.

More information about Time Orders can be found here.

Note: the decision of Sheriff McIntyre is not binding on other sheriffs

The Top 5 Debt Arrangement Scheme Providers 2017/18

The Top 5 Debt Arrangement Scheme Providers 2017/18

The Scottish Government have released figures showing who the top five providers of the Scottish Debt Arrangement Scheme were in 2017/18.

The largest provider by far, was the UK debt charity, Stepchange.

This was followed by four other providers, only two of whom are Scottish-only providers: specialist private debt firm, Carrington Dean and also Citizen Advice Scotland member, Citizen Advice Rights Fife.

In total, there are 16 providers named,  4 of whom are local authorities, 3 Citizen Advice Bureaux and 7 insolvency practitioner firms.

The list only names those providers who did more than 25 Debt Payment Programmes (DPPs) in 2017/18, but notes “other ” money advice providers account for 14.9% of all other DPPs delivered.

Reduction in numbers linked to cut in public funding of money advice services

However, the 2,318 Debt Payments Programmes that were approved in 2017-18, represents a 45% reduction in the number of Debt Payment Programmes that were approved three years earlier in 2014-15.

Local authority funded money advice services over that period also saw a 45% reduction in funding, suggesting the fall in number is linked with cuts in funding for money advice services. 

What is the Debt Arrangement Scheme?

The Scottish Debt Arrangement Scheme is a formal debt repayment plan that allows consumers who are struggling with their debts to repay them through an organised plan.

Benefits of the Scheme are it:

  • Freezes all interest and charges;
  • Those in the Scheme only make one payment per month; and
  • Borrowers are protected from all debt recovery action by lenders.

For more information on the Debt Arrangement Scheme, visit my page on it here.





StepChange Debt Charity Scotland1,15149.65%
Pinnacle Debt Solutions1245.35%
Carrington Dean1044.49%
Citizens Advice & Rights Fife994.27%
North Lanarkshire Council682.93%
Campbell Dallas562.42%
Wilson Andrews522.24%
Murray Stewart Fraser492.11%
South Lanarkshire Council411.77%
Begbies Traynor411.77%
Inverclyde Council HSCP291.25%
Hamilton CAB281.21%
Perth CAB261.12%
The Moray Council261.12%
All other money advisers32914.19%



Advice.Scot: When Imitation is Poor Flattery

Advice.Scot: When Imitation is Poor Flattery

For some bizarre reason, Advice Direct Scotland, an independent Scottish Charity, and an Independent Member of the Scottish Association of Citizen Advice Bureaux, has decided to run a pay per click campaign to promote their Advice.Scot site using the name of this site, Advice Scotland.

To save I am peeved is an understatement.

I have been operating this personal blog site, on a not for profit basis, since 2013 (it’s predecessor was, with the sole purpose of supplying information to people interested in finding out more about their personal debt problems, like other blogs, such as Debt Camel.

I registered before Advice Direct Scotland’s online domain name was registered ( A site that I find to be a shallow, static site, with a few telephone numbers and an online search facility that allows access to external resources.  Basically very little on the site itself for those that access it.

A site that also states that the online name for Advice Scotland Direct is “Advice.Scot”.

If that is the case, then why are they using the online name for this site in the headings for their own Pay Per Click campaigns. Why not use their own online name?

What is most infuriating about this, is the likely result will be my readers, or people searching for my site being taken to the wrong site. A site that in my opinion is far inferior in quality and content. This may be unavoidable, as we all know there is no shortage of less than reputable companies out there that utilise marketing strategies that are intended to mislead internet users into believing they are visiting one site when they are visiting another. But for that situation to be created by a member of the Scottish Citizen Advice Bureaux? Really?

What is wrong with Advice Direct Scotland’s own online identity that they can’t use that for their campaigns? If I can give them a bit of advice, you need to work at it, its hard work and it takes time and commitment to build your online identity.

Advice Scotland

Since 2013, has always operated under the same name, Advice Scotland and had it’s own distinct brand and look, and through hard work I have built up a loyal following of readers who return each month, whilst attracting many more new ones. When people seek personalised advice in the comments boxes, as you will see, I refer them onto reputable providers of advice,  such as Scotland’s Citizen Advice Bureaux, the National Debtline and the Scottish Buisness Debtline, or I suggest they seek the advice of a professional.

A Labour of Love

The site has become a labour of love, and has become a major occupier of my time, trying to produce regular quality blogs, updates and videos.  Then there is the cost of maintaining a server service, keeping domain names registered and paying for software and SSL certificates to ensure the site remain safe for people to visit. All out of my own pocket.

Then there is the cost on my time. I don’t have marketing assistant, PPC campaign officers or desktop publishers: I have built this site from the ground up several times now, wrote all the blogs myself (and I am still trying to upload historic blogs from my previous site) and make all the videos myself.

I have been maintaining this site and its predecessor since 2010, nine years now, whilst also being a prolific contributor to the print and online journals of other people and organisations, such as that of the Scottish Legal Action Group, the Scottish Financial News, the Scottish Legal New, The Firm and the Journal of the Law Society of Scotland. In any average week over the last 10 years (and some of the earliest blogs on this site date back to 2008), I have easily averaged 2 to 3 blogs a week on the issue of money advice. Hard work and commitment.

In addition to this I still have my day job as a Senior Money Adviser, managing staff, representing clients in courts and contributing to the development of debt policy in Scotland.

To then have another organisation to use the name of my blog (rather than their own online identity) is galling, particularly when their own debt resources on their site constitutes one or two paragraphs.

Now I can only assume the use of the Advice Scotland was intentional, but possibly it was an oversight that this was also the identity of my blog. If it was, I can only ask that going forward it is changed and I look forward to working with as part of the online money advice community in Scotland. debt advice page.

If it was not an oversight, I am flattered they like the name of my blog, Advice Scotland, but it is mine and surely they must appreciate more than anyone, just because you like it does not mean you can have it.

And what was I doing last night until 3am? Writing a blog and making a video. That is how you build a site.

Scottish Adviser