• David Fairhurst

Our support for local authorities’ response to the Breathing Space scheme

Updated: Aug 2

Mutual Ventures and our partner xantura are pleased to offer a new service to provide people struggling with problem debt and wider vulnerabilities with a period of protection from debt collection activities.


The Government’s Debt Respite Scheme (or ‘Breathing Space’) gives someone in problem debt the right to legal protections from their creditors. The legislation comes into force on 4th May 2021.


In order to enable local authorities to fulfil their obligations under the scheme and manage referrals, our partner xantura have created a targeted, low-cost Breathing Space solution, which is described below.


If you would like further information on the service, please contact david@mutualventures.co.uk.


What is Breathing Space?


There are two types of Breathing Space:

  1. A Standard Breathing Space will last for a duration of 60 days during which all debt collection will be frozen

  2. A Mental Health Crisis Breathing Space will last for the duration of any mental health treatment that an individual is undergoing plus an additional 30 days

Breathing Space is managed through an online portal, managed by the Insolvency Service. The primary route of referral to the portal is expected to be through debt advice organisations, such as the Citizens Advice Bureau, StepChange and the Money and Pensions Service. They will use the period where debt collection is frozen to support individuals with their problem debt and try to identify sustainable long-term solutions. Debt Advisors within Local Authorities will also be able to refer individuals into the Breathing Space programme.


What happens when individuals are referred into Breathing Space?


All their creditors (including councils) will immediately be informed that they have entered a Breathing Space and will be required to freeze all debt collection activity for that person. The creditor will be informed of the specific overdue debts that have been identified for that individual, but they will also need to confirm that the amount of these debts is correct, as well as identifying any other overdue debts the organisation holds for that individual. Where additional debts are identified they will need inform the Money Advisor as well as freezing collection activity.


What is the expected demand for Breathing Space?


Before the outbreak of Covid-19 and the subsequent recession the government was forecasting that roughly 700,000 people would be referred into Breathing Space in the first year – given the current economic conditions, this estimate could well end up being conservative.


With council debts forming an increasingly large proportion of debt arrears, even based on these estimates, an average sized council could expect to receive over 2,000 referrals in the first year of Breathing Space which will represent a significant administrative burden.


How can we help?


To enable local authorities to manage referrals effectively across their debt services and fulfil their obligations, our partner xantura has created a targeted, low-cost Breathing Space solution.


This solution enable them to address the key challenges by:

  1. Integrating with the Breathing Space APIs to enable a two-way flow of data between the council and the Breathing Space portal, removing the administrative requirements of managing communications with the Insolvency Service via e-mail and telephone

  2. Delivering an out-of-the-box workflow platform to ensure debt details are correct and frozen immediately and any additional debts are identified, frozen and passed back to the Breathing Space portal through a timely, efficient & auditable process

  3. Providing a full suite of management reporting and insight to enable councils to understand in real-time how Breathing Space is impacting them and their debt collection processes and respond to FOIs, queries from elected members and senior management reviews

If you would like further information on the service, please contact david@mutualventures.co.uk.

About our partnership with xantura


MV’s strategic partnership allows local authorities across the country to benefit from xantura’s innovative and ethical approach to analytics and Mutual Ventures’ expertise in organisational transformation.

xantura is a mission-driven organisation founded specially to help local authorities to improve outcomes for vulnerable people. It has over 10 years’ experience of working with local authorities across a range of areas including debt, homelessness, children’s services and adult’s services.


Regardless of the service that we provide, the ambition is always the same – to help local authorities to improve outcomes for their vulnerable residents by enabling their front-line staff to have access to all the information they need to make quicker, more informed decisions.


To visit the Xantura website click here.

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