Reform of government debt collection needed ‘now more than ever’

The Money Advice Trust, the charity that runs National Debtline and Business Debtline, has welcomed a new Cabinet Office call for evidence on fairness in government debt collection, calling the move an opportunity to bring about ‘real and lasting improvements’ to protect people in financial difficulty.

The call for evidence comes at a time when momentum is growing for change in the way that central government and local authorities collect debt. Earlier this month 55 cross-party MPs and peers called on the Chancellor to introduce a Debt Management Bill to embed a fairer approach to debt collection across all of government.

The call for change from Parliamentarians follows evidence from debt advice charities, including the Money Advice Trust, on the need for reform and a recent Centre for Social Justice report outlining how central and local government lag behind the private sector in their approach to debt collection.

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 24th 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 OBE, chief executive of the Money Advice Trust, the charity that runs National Debtline and Business Debtline, said: “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.

“We look forward to responding to the call for evidence and continuing to make the case for reform to protect people in financial difficulty.”