Stage Three Review – Final Report

In September 2019, Scottish Ministers committed to undertake a wide-ranging policy review of Scotland’s statutory debt solutions, with the aim of further enhancing and improving the system. This was in response to a recommendation put forward by the then Economy, Energy and Fair Work Committee following scrutiny of the Debt Arrangement Scheme (Scotland) Regulations 2019. It was agreed that the review should consist of three stages.

The three stages

Stage One involved an examination of immediate priorities that could be taken forward during the Parliamentary session. It specifically looked at measures that would help address the consequences of the COVID-19 pandemic. Stage One concluded with the Bankruptcy (Miscellaneous Amendments) (Scotland) Regulations 2021 coming into force on 29 March 2021. These regulations made permanent some emergency measures introduced through the Coronavirus (Scotland) (No.2) Act 2020.

Stage Two of the review was undertaken by three stakeholder-led working groups, with a remit to consider the operation of existing statutory debt solutions and provide recommendations for improvement. The Scottish Government developed specific proposals from these recommendations and issued a public consultation in August 2022. The proposals taken forward that required primary legislation were introduced in the Bankruptcy and Diligence (Scotland) Act 2024 which came into force on 15 July 2024. The Act is being commenced in stages to factor in other associated work required, for example amendments to court rules and further stakeholder engagement. 

The remaining proposals have been/will be taken forward through a mix of secondary legislation and operational guidance. The secondary legislation introduced to date are as follows:

• The Bankruptcy and Debt Arrangement Scheme (Miscellaneous Amendment) (Scotland) Regulations 2023
• The Protected Trust Deeds (Miscellaneous Amendment) (Scotland) Regulations 2024
• The Bankruptcy (Scotland) Amendment Regulations 2024

This third stage has been a longer-term strategic review of statutory debt solutions to assess if they meet the needs of a modern economy. It has been run independently from AiB and the broader Scottish Government. Stage Three formally launched in March 2024 with a stakeholder roundtable to understand what was working well currently, and what was not. It was followed by a public call for evidence to provide insight and data to inform the initial Stage Three work. The call for evidence ran from 27 April - 21 June 2024. The responses were analysed in the second half of 2024, and several supplementary roundtables and one-to-one interviews were held with stakeholders to further develop findings and inform the review’s direction of travel.

Consultation and research

A public consultation, setting out key findings to date and various proposals to reshape the regime, was published on 12 March 2025 and closed on 4 June 2025. A summary of responses to the questions posed in the consultation and the subsequent analysis by the review team is available in the Feedback and Recommendation document which has been published alongside this report. Both the call for evidence and the consultation received a strong response rate and the insight and evidence from stakeholders has been key in shaping the recommendations arising from the review. It is important to note however that Scottish local authorities were generally underrepresented in the pool of respondents, and the review team has been mindful of this in reporting its findings.

Away from the stakeholder responses, the review has also been directly informed by people in debt. Two nationally representative surveys have been undertaken by ScotPulse on behalf of the review team, one with people with personal debts only and one with self-employed small business owners. The outputs of the ScotPulse consumer research are published alongside this report. The review team also facilitated focus groups with consumers to further explore the findings of the surveys and test our recommendations.

AiB data about the current solutions has been fundamental in informing the work, as has existing data and research published elsewhere. Furthermore, the review team has been in regular contact with the Insolvency Service in England and Wales throughout the review, given the similar remit of the ongoing Personal Insolvency Review. More broadly, we have also engaged MaPS, which has a remit for debt advice in England and a UK-wide responsibility for money guidance and developing and coordinating a national strategy linked to debt and money issues.