Debt charities welcome Government probe into debt management
It is asking for input from the debt advice sector, private and public sector creditors, debt collection agencies, the voluntary sector and members of the public.
Debts that could be owed to the Government include council tax, income tax, benefits overpayments and Universal Credit advances.
Debt charities have welcomed the move, saying that Government debt management needs to be reformed.
The Money Advice Trust, which runs National Debtline and Business Debtline, said the move was an opportunity to bring about “real and lasting improvements” to protect people in financial difficulty.
Last week, debt charities called for urgent reform to council tax collection to be implemented before bailiff home visits – which the Government legislated to ban during Covid-19 restrictions – resume on 24 August.
The end of the ban has led to fears of a flood of bailiff visits as councils in England and Wales rush to collect outstanding debts, adding financial and emotional pressure onto households already struggling with the financial impact of Covid-19.
Joanna Elson, chief executive of the Money Advice Trust, says: “The Cabinet Office’s new call for evidence is a welcome opportunity to bring about real and lasting improvements in the way government collects debt.
“The finances of millions of households have been hit hard by the Covid-19 outbreak – and a fairer approach from central and local government is needed now more than ever. We need a Government Debt Management Bill that enshrines in law a fairer approach, independent bailiff regulation and – in the much shorter term – urgent reforms to council tax collection in the wake of the outbreak.”
Fellow debt charity StepChange said debts owed to government have been subject to inconsistent and poor practice, leading to harm and potential danger to vulnerable people.
Peter Tutton, head of policy at StepChange, says: “The Government has some serious catching up to do. Despite bringing forward some excellent new initiatives such as the forthcoming Breathing Space scheme, the Government’s approach to assessing affordability can be poor. The inflexible mechanisms it sometimes adopts to pursuing its own debt, frighteningly but fruitlessly, from people who cannot afford to pay are long overdue for reform.”
The consultation closes at 11pm on 21 September 2020. Respondents can find out more information and submit their comments at https://www.smartsurvey.co.uk/s/Y0H0P/