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

1. The Recession
Coping with the Human Cost
The difference good advice can make
the charity for your community

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. 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. Churning
SOCIAL EXCLUSION
Unemployment
££££
3
££
2
£
1
Labour LIFE EVENT
Market
Social
Exclusion
CITIZENS ADVICE BUREAUX
Work Experience Skills Confidence Engagement
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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.
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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.
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7. … the charity for your community

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
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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%)
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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%
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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%
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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
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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)
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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
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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
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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
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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
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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
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19. A Helping Hand
A Helping Hand
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21. Thank you
• Thank you to the Volunteers and Staff of
the CAB in Cornwall.
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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
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23. Leaking Bucket Syndrome
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