Debt charity braced for £12m cut in government funding

30 Jan 2023 News

Phil Andrew, CEO of StepChange


Debt advice charity StepChange is preparing for a £12m cut in its funding from central government, with the charity having to be “significantly more efficient” as a result.

Speaking to Civil Society News, the charity’s chief executive Phil Andrew said the charity would be down by around £8m in net fees once the government’s grants end next month.

StepChange, which gets most of its money from creditors such as banks to which its service users owe money, expects its staff headcount to reduce to around 1,000 people by the end of 2023.

The impending funding cut has contributed to the staff cut, which was also driven by the charity’s shift to providing more services online in recent years.

Andrew, who will leave StepChange to lead housing group Orbit in July, said that since he joined the debt advice charity in 2017, its headcount has reduced from about 1,600 people.

“We've reduced our headcount numbers quite a lot and the approach has been to have fewer colleagues, but pay them better,” he said.

Andrew says the charity has introduced role development boundaries so debt advisers can gain promotions and higher salaries by upskilling “and that's worked well”.

Funding cut ‘won’t affect campaigning’

According to StepChange’s documents filed with the Charity Commission, it received £12.1m in government grants in 2021, £10.5m in 2020, around £3.7m annually the two years before that and nothing in 2017.

Speaking about the £12m cut to government funding from February, Andrew said: “We have just got to be significantly more efficient.”

Asked whether losing the Westminster funding would change the charity’s approach to criticising the government, Andrew said: “Not at all.” He added that the charity spends around £4m a year on its campaigning and policy work.

“We've always criticised the government when it has been necessary. And we've been very, very clear, that that's what we will do. Because if it's necessary, and to be fair to government, it's never as far as I've ever seen, impacted their funding decisions.”

A full interview with Andrew was recently published on Civil Society News.

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