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The Numbers Don't Lie

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Guest blog by Muna Yassin MBE

To mark Black History Month, Muna Yassin MBE, Managing Director of our partner Fair Money Advice, writes about how Black communities are disproportionately affected by debt.

As we enter the last two weeks of Black History Month 2021, I’d like to focus on a subject we don’t discuss often enough: Black Futures. Or more specifically, Black Financial Futures. This isn’t to undermine the importance of learning about our history, I just get frustrated that less emphasis is given to the future of our Black communities. This is where we can have influence as a society.

The last 20 months have been difficult for many of the most vulnerable sections of our society. The pandemic has wreaked havoc with people’s livelihoods and many families have struggled to make ends meet. Londoners, already facing high costs of living - and the highest housing costs in the country - are bracing themselves for the greatest risk of job losses now the furlough scheme has ended. London Councils estimated a sixth of the workforce in London (1 million) were furloughed. We also know from data that Black African and Black Caribbean men are 50% more likely to work in sectors that have been shut down for most or all the coronavirus crisis.

Throughout the crisis, our Debt Free London partnership has provided access to debt and money advice services - providing a much-needed lifeline for 44,000 anxious Londoners. However, our data for 2020-21 reveals a worrying picture for our Black communities. Compared to the general population of London, our clients remain disproportionately from Black African and Black Caribbean ethnic backgrounds. Together they make up 31% of our clients. Population wise, they only represent 11%.

More worryingly, Black Caribbean clients have the highest number of debt types (4.1) compared to the average (3.5). Further compounding this are the type of debts both Black Caribbean and Black African clients are disproportionately affected by - priority debts. Priority debts, if not resolved quickly, can have severe and irrevocable consequences. Alarmingly, nearly half (48%) of our clients have rent arrears – but staggeringly this rises to 57% for Black African and 59% for Black Caribbean clients.

Problem debt is corrosive and the link between debt and mental health is long established, similarly the higher rates of mental health problems within the Black community shows, to me, a clear link between the level of socioeconomic disadvantages faced by Black people and the burden this places on their mental health. Wrap-around services that deal with the underlying reasons are vital and partnerships between debt advice and mental health services - like those established at Fair Money Advice (FMA) and other DFL partners - are an example of how future services can be more effective and impactful. Integrated approaches are the minimum requirement in 2021.

What else can we do? Well for one, we all need to keep collecting this type of data. We can only deliver responsive and tailored support when we know the extent and nuances of the problems being faced.

The ground-breaking Colour of Money research published in 2020 by The Runneymede Trust shows the level of work that needs to be done to bridge the wealth gaps between White and Black British populations, but also the need to bridge the gaps within our minority communities. To ensure policymakers and financial services providers make the necessary changes, we need to keep collecting, sharing, and highlighting any inequalities in our data. Using broad-brush approaches to deal with distinct needs and issues will not materialise in effective solutions.

We also need to make services more accessible and joined-up. It’s rare for a client with debt problems to not to be affected by another linked social welfare need – access and referral arrangements with benefits, housing and mental health services are essential to successful outcomes. Holistic support means people are more likely to be successful in their efforts to become debt free.

Finally, we can at the very minimum ensure our service providers reflect the communities they serve. We’re proud at Debt Free London that we have a mix of grassroots organisations embedded in the community. Our Advisers, Supervisors and Senior Managers across the partnership visibly represent the multilingual, multicultural, and diverse city we live and work in.

Our mainstream organisations need to move away from just having diversity in their frontline teams – we need diversity of thought and experience in positions that design, commission, and fund services too. Similarly, our financial services sector has been slow in addressing these issues. I was however pleased to see the FCA CEO Nikil Rathi make clear in March 2021 that diversity and inclusion are regulatory issues. We hope this and other efforts being made by innovative organisations bring about the changes necessary to ensure our Black communities can thrive.

We know London has a rich history for Black communities. Let’s make the future richer. If you’d like to work with us to make that happen, then join us at our Annual Conference this Thursday where we’ll share our full results for the year.

We look forward to working collaboratively with you.