Councillors have been told it is ‘too early to say’ whether new measures aimed at protecting people in debt will have an impact on the authority’s finances.

The Debt Respite Scheme – also known as breathing space – is a government initiative which came into force on May 4. The legislation aims to give more time to people in debt who are struggling, so they can seek help from a qualified debt advisor.

It is available to anyone with problem debt and protects them from most enforcement and recovery action for up to 60 days, stops contact from creditors and freezes interest and charges on what they owe.

An enhanced version of the scheme is aimed especially at those who are receiving treatment for a mental health crisis. It suspends action for as long as they are receiving treatment, with an additional 30 days on top of that.

An application for breathing space can only be made by a debt advice provider who is authorised by the Financial Conduct Authority (FCA).

At a meeting of the council’s Corporate Policy and Performance Board yesterday evening (Tuesday), the borough’s finance chief Ed Dawson briefed members that as of the end of May, there had been 26 applications for breathing space by people who owed the council money totalling £48k. Around 80% of that was in relation to council tax debt.

He said: “It’s too early to say whether this process will have any material effect on our recovery of debts, we will just have to see how it goes.”

Board member Cllr Noel Hutchinson said: “Is there any sort of promotion to people who may be able to take advantage of it [the scheme], particularly those in terms of their mental health situation who may be less able at times to know it’s there or go to the right place?”

Mr Dawson replied: “In terms of signposting, it’s more government led, but bodies such as Citizens Advice are acutely aware, as are agencies like StepChange, so they will promote it to clients who are going into that situation.

“With those suffering a mental health crisis, our colleagues in mental health and adult social care are also acutely aware of it.

“On that side of it, it’s more incumbent on us to make sure that anyone who needs that advice can be identified.”

He added though that the scheme could have “implications” for council priorities further down the line.