Debt management charity Stepchange to make 170 redundancies

Share this article

According to the trade union, Unite, the debt advice charity StepChange has announced plans to make up to 170 workers redundant, reducing its workforce by 10 per cent, with the Leeds and Newcastle offices bearing the brunt in the reduction in staff.

This is in response to a funding crisis at the company, caused by the decrease in demand for its services during the Covid 19 pandemic. The Unite union predicts the move will be “devastating” as the need for debt advice is expected to surge, once the Government’s funded furlough scheme comes to an end in September.

The funding model for the charity is a voluntary 13% commission from lenders for helping clients manage their debt. However during the pandemic people have been better off, so the charity has had less business. This is because employees have received increased financial support from the Government during the pandemic, via the furlough scheme and £20 Universal Credit uplift. This has meant that demand for the charity StepChange’s advice fell from more than 300,000 people in 2019 to 200,000 people in 2020.

Phil Andrew, chief executive of StepChange, said the planned redundancies are a “difficult and painful decision” but is “the right thing” to protect the charity’s long-term future.” he added “The inescapable reality is that our funding structure depends upon advice volume, which is why we are sadly having to introduce cost-cutting measures that include, but are not limited to, redundancies.”

A worker from StepChange commented about the plans to replace workers with an online debt advice tool, saying “Our clients want a supportive, caring person to talk to, not a machine. Our advisers are our strongest asset.”

Source: Leeds Live

Similar Articles

Don't Miss

OLED material manufacturing firm to create 100 jobs in Shannon

100 new high-tech jobs are to be created in Shannon. OLED Material Manufacturing and PPG announced a multi-million euro capital investment at its Co Clare plant.

Federal construction contractor creates 40+ new high-wage jobs

Federal construction and engineering contractor Conti Federal Services chose Orlando as its new headquarters, which is now located in the Central Florida Research Park, which is the sixth largest research park in the United States in the next four years. These positions will pay about 150% of the median salary in Orange County. The company moved its headquarters from New Jersey and is currently hiring for positions in central Florida.

Furlough numbers fall by another 590,000 despite support from the UK government

Furlough numbers declined by 590,000 last month, yet the government continues to support 1.9 million jobs. With the next level of the scheme's support being withdrawn this weekend, the decline in earnings being insured by the scheme became apparent.