The proposals, which could have the effect of transforming the funding of money advice in Britain, are modelled directly on a consumer credit counselling service in Houston, Texas.
A pilot scheme will open in Leeds next spring and according to Malcolm Hurlston, the plan's chief instigator, the eventual idea is for a network of about 20 similar local agencies across Britain.
Unlike existing money advice services these will aim to be self- financing by charging credit companies commission of 15 per cent on every debt recovered.
This direct link between debt recovery and funding leaves many money advisers unhappy. The National Association of Citizens Advice Bureaux, the organisation which co-ordinates much existing grass-roots money advice work, is not supporting the Leeds project.
'We believe very firmly that effective money advice must be independent,' says the association's money advice researcher, Terry Walker. 'Our worry is that there could be too close a link between the funding received from credit companies and the advice on debt repayment levels for individual clients.'
Funding for the first year of the Leeds pilot agency is already in place, with Barclays and GE Capital the main sponsors. By normal money advice standards the service will be well resourced, with as many as 15 people likely to be employed there.
Training for the money advisers will include a week spent in Houston. 'It is more efficient and more inspirational,' says Mr Hurlston.
As in Houston, selected clients of the Leeds agency will be invited to undertake a debt management programme with the aim of paying off their debts within a four-year period. They will undertake not to take out further credit and will commit themselves to paying the agency each month an agreed sum. The agency will then distribute it between the various creditors, claiming the 15 per cent commission payments in return.
However, only about a third of the clients seen by the Houston centre are placed on this debt management programme. While a further third are provided with a self-help debt advice pack, that still leaves the remainder - typically those without employment or reliant on state benefits - less well catered for.
Although Mr Hurlston says that the British credit counselling services, which will be non-profit- making, will try to help low-income debtors even where there is no financial incentive to do so, some advisers fear that poorer people will be left to turn to an increasingly under-resourced voluntary sector for help.
'I'm very concerned that we will end up with a two-tier system,' says Simon Johnson, head of money advice at the pioneering Birmingham Settlement. 'I don't have any problem with the concept of the finance industry paying for money advice services.
'My concern is if an individual centre's income and survival is tied directly to its performance in receiving payments.'
He is sceptical that the proposed credit counselling agencies will be able to survive financially without additional grant funding.
The problem is that recent attempts by the Money Advice Trust to persuade credit companies and lenders to contribute to conventional money advice work have been relatively unsuccessful.
In contrast, Mr Hurlston says that creditors are enthusiastic to support his US-style credit counselling scheme. 'I think the people putting money into this scheme see it as a win, win, win situation,' he says.
'It is obviously beneficial to creditors, it is directly beneficial to debtors and directly beneficial to society. There is a lot of excitement in Leeds.'
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