The letter urges Mr Swinney to use the budget to support action to tackle the issue of debt to public bodies.
Signatories to the letter highlight alarm at “the increasing level of debt owed to public bodies by the poorest in Scotland and the role this plays in trapping people in poverty”.
We are asking for public bodies in Scotland to pause debt recovery for those on the lowest incomes for at least the next six months, to give the poorest households breathing space during the cost of living crisis.
Organisations who have signed the letter are seeing increasing demand on their own hardship funds and financial support they provide in order to help those burdened with unsustainable levels of public debt.
These debts typically include council tax charges, Universal Credit advance payments, rent arrears and even school meal debt.
Paying back this debt means households often cannot afford to pay the bills and families are unable to buy the most basic essentials for their children.
Last year Aberlour published research that highlighted the scale of debt to public bodies owed by Scottish families with children in receipt of Universal Credit.
They found that more than half – nearly 80,000 families – have their monthly income reduced by around 10%, equating to £80 on average, as a result of deductions by the DWP to recover debts to public bodies.
As a result, tens of thousands of families who receive the Scottish Child Payment are not feeling the benefit of the increase in income it provides as it is swallowed up by deductions to cover these debts.
We then published a further report highlighting that those on the lowest incomes are ten times more likely to have council tax arrears than those on the highest incomes.
This research showed that almost three-quarters of those with debts to public bodies have avoided putting the heating on to save money, and more than half have cut down on meals.
The letter calls on the Scottish Government to use the debt and arrears levers available to them to urgently respond to the emergency facing households across Scotland, due to the ever-worsening cost of living crisis which they state is contributing to rising poverty.
Three actions that the letter urges John Swinney to commit to in the budget to tackle “the debt crisis people on the lowest incomes in Scotland face” include:
- pausing public debt recovery for at least 6 months;
- providing funding and flexibility for local authorities to write off public debts in some cases;
- writing off of all existing school meal debt.