The Recession
Coping with the Human Cost
   The difference good advice can make




                         the charity f...
The Financial Storm
•   Record Levels of Debt (Personal Debt £1.4 trillion)
•   An end to special mortgage rates (3m)
•   ...
Meeting the NEW needs
• Personal life events trigger unmet need
• Cataclysmic shock events:- redundancy or severe change i...
Churning
                              SOCIAL EXCLUSION
Unemployment

                                                    ...
Savings
 Household Savings Levels by weekly income.

  Weekly income              Households with             With savings...
Debt
• Average household debt in UK excluding
  mortgages is £9,200.
• However the figure is £21,300 if the
  average is b...
… the charity for your community
Cornwall’s Economy ?
Estimates       Households    Annual Interest   Households        Mortgage
                with Debts...
Total   Q1      Q2      Q3      Q4      Total   Cornwall %
                         07/08   08/09   08/09   08/09   08/09 ...
Total              Total          Cornwall CAB
                      April-Sept 08      April-Sept 09        Increase


Mo...
Total              Total          Cornwall CAB
                     April-Sept 08      April-Sept 09        Increase


Ter...
Repossessions
• Council of Mortgage Lenders figures are
  estimates and relate only to first charge lenders
  who are memb...
County Court Representation
Month       Adjourned        Suspended   Additional    Outright   Arrears      Mortgage
      ...
The Combined Result

• Clients using the Welfare Benefits Advice service were, on
  average £72 per week better off

• Cli...
What about the Future?
District                   Employees       Self employed       Recession to Recovery LGA
          ...
PBR - Treasury Forecasts
• Number claiming JSA would peak at
  1.75 million in the middle of 2010, implying
  an overall u...
Cornwall
• Economy Monitoring Monthly Update
• Rock Pool Cornwall 12 month lag?
• Holistic - Quality & Effective Partnersh...
Support for Jobseekers ~ Cornwall
                                                          Day One                    6 M...
A Helping Hand
A Helping Hand




               … the charity for your community
2n
                                      d




                                                0
                         ...
Thank you
• Thank you to the Volunteers and Staff of
  the CAB in Cornwall.




                    … the charity for your...
Households & Property
• Repossessions are more likely to be
  located in lower value properties
• Unemployment and reducti...
Leaking Bucket Syndrome




              … the charity for your community
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The Recession Coping with the Human Cost

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Presentation at the unionlearn
Training and Development day for Union Reps in Cornwall by John Ede, Citizens Advice Bureau.

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The Recession Coping with the Human Cost

  1. 1. The Recession Coping with the Human Cost The difference good advice can make the charity for your community
  2. 2. The Financial Storm • Record Levels of Debt (Personal Debt £1.4 trillion) • An end to special mortgage rates (3m) • First Time Buyers (1m out of 11.8 m mortgages) • Falling House Prices (20% and counting) • The Credit Crunch (Restricted Credit, increasing interest rates) • Rising Prices (Essential Bills, food, utilities, fuel) • Limited Savings (1/2 of UK households have little or no savings) • Changing Incomes (Reduced hrs and/or job loss) … the charity for your community
  3. 3. Meeting the NEW needs • Personal life events trigger unmet need • Cataclysmic shock events:- redundancy or severe change in economic circumstances, sudden illness • Transitions between life stages:- especially those involving a change in role, status, expectations and responsibility • Capacity eroding changes:- spiralling and unsustainable indebtedness, becoming a primary carer, onset of mental health issues • Job Centre Plus/Inclusion Cornwall:- Cornwall Works LAA, ESF, CW 50 +, Welfare Benefits Group, Debt and Financial Inclusion Group, Real Choices Tackling Child Poverty, Cornwall Migrant Workers Group, Mental Health mini Summit, Debt Advice in JCP Offices, Drs Surgeries, One Stop Shops … the charity for your community
  4. 4. Churning SOCIAL EXCLUSION Unemployment ££££ 3 ££ 2 £ 1 Labour LIFE EVENT Market Social Exclusion CITIZENS ADVICE BUREAUX Work Experience Skills Confidence Engagement … the charity for your community
  5. 5. Savings Household Savings Levels by weekly income. Weekly income Households with With savings less No Savings than £1,500 £300-400 34% 22% £400-500 29% 24% £500-600 25% 24% £600-700 18% 24% So 56% of households with income £300-400 have less than £1,500 Savings i.e. 1 months income- just enough till next pay day. … the charity for your community
  6. 6. Debt • Average household debt in UK excluding mortgages is £9,200. • However the figure is £21,300 if the average is based on the number of households who actually have some debt. • Plus Average Mortgage £103,000 UK • Penzance County Court £180,000. … the charity for your community
  7. 7. … the charity for your community
  8. 8. Cornwall’s Economy ? Estimates Households Annual Interest Households Mortgage with Debts (20%) with Mortgages Interest (6%) Caradon 15,000 £65m 12,800 £80m Kerrier 17,000 £73m 13,700 £85.5m N Cornwall 14,750 £63.5m 10,300 £64m Penwith 12,000 £51.75m 8,300 £51.75m Restormel 17,250 £74.5m 14,000 £87.5m Carrick 16,500 £71m 12,500 £78m Cornwall 92,500 £398.75 71,600 £446.75m Debt interest £357/ month Mortgage interest £520/ month … the charity for your community
  9. 9. Total Q1 Q2 Q3 Q4 Total Cornwall % 07/08 08/09 08/09 08/09 08/09 08/09 (National %) Mortgage & Secured 582 211 231 280 368 1090 +87% (+49%) Loan Arrears Fuel Debts 514 105 109 144 226 584 +14% (+19%) Credit, Store & Charge 5394 1395 1168 1170 1444 5177 -4% (+9%) Card debts Unsecured Personal 3039 854 745 757 1008 3364 +11% (+10%) Loan debts Bankruptcy 1075 227 334 405 444 1410 +31% (+24%) Council Tax Arrears 1061 220 282 340 484 1326 +25% (+15%) Dismissal 820 195 282 248 334 1059 +29% (+17%) Redundancy 379 113 174 359 326 972 +156% (114%) Jobseekers Allowance 474 138 157 281 352 928 +96% (61%) … the charity for your community
  10. 10. Total Total Cornwall CAB April-Sept 08 April-Sept 09 Increase Mortgage & Secured 442 583 32% Loan Arrears Fuel Debts 214 516 141% Credit, Store & 2563 2847 11% Charge Card debts Unsecured Personal 1599 1956 +22% Loan debts Bankruptcy 561 947 69% Council Tax Arrears 502 788 57% … the charity for your community
  11. 11. Total Total Cornwall CAB April-Sept 08 April-Sept 09 Increase Terms & Conditions 302 405 34% of Employment Redundancy 287 370 29% Threatened 257 269 5% Homelessness Domestic Violence 41 82 +100% Relationship 652 765 17% Breakdown Rent Arrears 346 493 42% … the charity for your community
  12. 12. Repossessions • Council of Mortgage Lenders figures are estimates and relate only to first charge lenders who are members of the CML. • They do not include other secured lending or “Sub Prime” lenders • 2007 CML 27,100 repossessions. • Estimate 2007 including Sub Prime 53,000 • Plus the Sale and Rent back schemes 27,000 • Estimate for CML 2009 Repossessions was 74,000 revised December 2009 to 48,000 … the charity for your community
  13. 13. County Court Representation Month Adjourned Suspended Additional Outright Arrears Mortgage on Terms Time Orders Outstanding Oct 7 7 1 6 £110,547 £2,040,962 Nov 4 9 4 2 £40,929 £1,271,362 Dec 0 4 1 1 £24,699 £822,011 Jan 1 8 5 1 £70,015 £996,229 Feb 4 4 0 0 £22,788 £445,174 March 5 2 4 2 £48,939 £1.092,795 Total 21 34 15 12 £317,917 £6,668,533 46 cases in Penzance out of a total of 82 £190,529 average mortgage outstanding (49 mortgage, 33 landlord) … the charity for your community
  14. 14. The Combined Result • Clients using the Welfare Benefits Advice service were, on average £72 per week better off • Clients using the Debt Advice service were, on average £160 per week better off • Where clients took advantage of using both Welfare Benefits and Debt advice they were, on average £232 per week better off … the charity for your community
  15. 15. What about the Future? District Employees Self employed Recession to Recovery LGA Cornwall 2008 Cornwall 2008 Reduction in No. of Jobs Caradon 29,900 10,000 25% 2,900 Carrick 30,700 11,500 27% 4,300 Kerrier 35,700 7,500 17% 3,200 N Cornwall 36,700 6,700 15% 2,700 Restormel 36,400 9,200 20% 3,800 Penwith 20,900 9,000 30% 2,400 Cornwall 190,300 53,900 22% 19,300 May 2008, Working Age Benefits 42,300 19,300 Plus Short Time Working … the charity for your community
  16. 16. PBR - Treasury Forecasts • Number claiming JSA would peak at 1.75 million in the middle of 2010, implying an overall unemployment total of 2.7m. • predicted JSA claimant count would remain at 1.5m at the end of 2012 = 2.3m overall unemployment • Employers were retaining staff by agreeing shorter working hours and freezing pay … the charity for your community
  17. 17. Cornwall • Economy Monitoring Monthly Update • Rock Pool Cornwall 12 month lag? • Holistic - Quality & Effective Partnerships • Stronger Communities- Take Responsibility • Reduced Income:-Cornwall Predicted Job Losses, Short time working, Self Employed, Pensioners Savings and Interest (£80 to £1.94pm) • Debt, Health, Mental Health • Training Front Line Staff. • Increasing Interest Rates … the charity for your community
  18. 18. Support for Jobseekers ~ Cornwall Day One 6 Months 12 months+ Next Step IAG ESF Employability/basic skills Programme Centre Current New Deals Employer Incentive Additional Training Voluntary Work Experience Self employment support Job Boost NJR/Flexible New Deal and support contract ** available now … replaced by FND ** from April 2009 ** from October 2009 … the charity for your community
  19. 19. A Helping Hand A Helping Hand … the charity for your community
  20. 20. 2n d 0 5 10 15 20 25 30 35 40 45 50 Fe 3r b d Fe 4t b h Fe 5t b h Fe 6t b h Fe 7t b h Fe 8t b h Fe 9t b h F 10 eb th F 11 eb th F 12 eb th F 13 eb th F 14 eb th F 15 eb th F 16 eb th F 17 eb th F 18 eb No of Client Contacts th F No of Volunteer Advisors 19 eb th Advisors and Contacts per day F 20 eb th F 21 eb st Volunteers 22 Feb nd F 23 eb rd F 24 eb th F 25 eb th F 26 eb th F 27 eb th Fe b … the charity for your community
  21. 21. Thank you • Thank you to the Volunteers and Staff of the CAB in Cornwall. … the charity for your community
  22. 22. Households & Property • Repossessions are more likely to be located in lower value properties • Unemployment and reduction in income were the main causes of arrears • Unemployment was found to often be followed by relationship breakdown … the charity for your community
  23. 23. Leaking Bucket Syndrome … the charity for your community

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