Changing Fortunes: Results from a Randomized Trial of the Offer of Debt Advice in England and Wales

• Author: Nigel J. Balmer,Pascoe Pleasence
• DOI: http://doi.org/10.1111/j.1740-1461.2007.00102.x
• Date: 01 November 2007
• Published date: 01 November 2007

Changing Fortunes: Results from a

Randomized Trial of the Offer of

Debt Advice in England and Wales

Pascoe Pleasence and Nigel J. Balmer*

A randomized trial was conducted to assess whether the offer of advice to

those experiencing debt problems and who had yet to obtain any formal

advice, had a positive impact on their financial and general circumstances.

The participants were drawn from 16 Jobcentres (welfare offices) in 13 areas

of England and Wales. In all, 402 participants were included in the trial at its

outset; 234 participants remained in the trial at the 20-week followup. There

was no significant difference in the rate at which intervention and control

group respondents had resolved their debt problems at the 20-week fol-

lowup. However, the former were significantly more likely to describe their

financial position as “better” than at baseline. There was also evidence that

they became more knowledgeable about their financial circumstances, more

focused on dealing with priority debt, and more optimistic about their future

prospects, relative to control group counterparts. These findings, though,

fell short of statistical significance. The findings provide the first experimen-

tal evidence of a positive impact of the offer of debt advice. The study also

highlights the difficulties of applying experimental methods in a social

setting. One lesson drawn from the difficulties encountered in running this

trial is that takeup is likely to be low for some forms of pro-active advice for

sensitive problem types experienced among disadvantaged communities.

*Address correspondence to Pascoe Pleasence, Legal Services Research Centre, Legal Services

Commission, 85 Gray’s Inn Rd., London, WC1X 8TX, U.K.; email: pascoe.pleasence@

legalservices.gov.uk, or University College London, Bentham House, Endsleigh Gardens,

London, WC1H 0EG, U.K.; email: p.pleasence@ucl.ac.uk. Pleasence is Head of the Legal

Services Research Centre and Professor of Empirical Legal Studies at University College

London; Balmer is a Principal Researcher at the Legal Services Research Centre and an

Honorary Senior Research Fellow in the Faculty of Laws, University College London.

The authors thank Alexy Buck and Vicky Kemp of the Legal Services Research Centre, Simon

Wessely and Amy Iversen, King’s College London, Andrew Briggs and Mavis Maclean, University

of Oxford, Iain Chalmers, James Lind Library, and Hazel Genn of University College London,

and Loraine Gelsthorpe, University of Cambridge, for their assistance in the development of

this study. RCT registration: ISRCTN68363641.

Journal of Empirical Legal Studies

Volume 4, Issue 3, 651–673, November 2007

©2007, Copyright the Authors

Journal compilation ©2007, Cornell Law School and Blackwell Publishing, Inc.

651

I. Introduction

A number of studies have examined the causes and consequences of debt

problems. Debt has been shown to follow from unemployment, sudden loss

of income, family breakdown, and single parenthood (Kempson 2002;

Edwards 2003; Department for Work and Pensions & Department of Trade

and Industry 2004; Buck et al. 2004; Balmer et al. 2006; Pleasence 2006).

Evidence from the 2004 English and Welsh Civil and Social Justice Survey

and a series of follow-up qualitative interviews indicates that debt can also

adversely impact on people’s employment and personal relationships

(Pleasence et al. 2007; Turley & White 2007). Debt has also been linked with

age, form of tenure, anxiety, and ill health (Nettleton & Burrows 2000;

Drentea 2000; Drentea & Lavrakas 2000; Reading & Reynolds 2001;

Kempson 2002; Jacoby 2002; Edwards 2003; Kempson et al. 2004; British

Medical Association 2003; Tedula & Young 2004; Balmer et al. 2006;

Pleasence 2006; Pleasence et al. 2007). For example, studies have shown a

relationship between debt and maternal depression (Reading & Reynolds

2001) and credit card debt and ill health (Drentea & Lavrakas 2000). More-

over, some studies have suggested that debt not only adversely impacts on

health, but also increases the likelihood that people will use health services

(Nettleton & Burrows 2000; Edwards 2003). This has led to some doctors in

the northwest of England “prescribing” debt advice in favor of medication

for stress (Social Exclusion Unit 2004).

The U.K. government recently described “the importance of ensuring

that consumers who get into debt problems should have ready access to

sound, high quality debt advice” (Department of Trade and Industry 2001).

Indeed, the government signaled an intention to improve advice and

support for those who are disadvantaged through debt in a 2003 consulta-

tion paper. This was followed by an “Action Plan” on tackling overindebted-

ness and the establishment of a Financial Inclusion Fund (Department for

Work and Pensions & Department of Trade and Industry 2004). A large

proportion of this fund is now being directed to funding debt advice;

£6 million has been allocated to the Legal Services Commission to pilot

outreach advice. A further £45 million has been allocated to the Depart-

ment of Trade and Industry for expansion of face-to-face advice services

(Department of Trade and Industry 2005). However, while links between

debt problems, broader social problems, and morbidity are becoming

increasingly established, there is a paucity of clear and reliable empirical

evidence on the impact of debt advice.

652 Pleasence and Balmer