Investments  

Government targets £22bn of uncollected debt

Government has created a new company, Integrated Debt Services Ltd, to provide a single point of access for a range of public sector debt management and collection services in 2015.

Some £22.6bn of unrecovered debt. from sources including “unpaid fees, taxes, fines and loans, ineligible benefits or grants and unrecovered costs from court cases”, will be targeted through the new joint venture launched today with the TDX Group, an Equifax company.

The new company will use a range of “proven and effective debt management services” to support debt recovery with a focus on increasing returns, while using detailed analytics so that individuals are treated appropriately and fairly.

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The service will launch initially with HM Revenue and Customs, the Department for Work and Pensions, the Home Office, Student Loans Company, the Legal Aid Agency and the Driver and Vehicle Licensing Agency.

It will also actively offer services to the wider public sector with an ambition to grow its services, the government said in a statement.

Government currently collects more than £40bn of debt every year and already uses private sector organisations to improve recovery. It said the company represented a “strategic cross-government approach” that should help retyurn more money by offering a “consistent tool for all departments”.

Mark Sanders, managing director of TDX Group, explained that its approach uses data and analytics to build a fuller understanding of the individual in debt. “We believe this tailored approach is key to the delivery of a service which is effective and fair for all parties involved.”

Kris Hopkins, local government minister, added that improving tax collection rates and reducing arrears can make sensible savings to help keep overall council tax bills down and protect frontline services.

“It is important that councils are sympathetic to those in genuine hardship, are proportionate in enforcement and do not overuse bailiffs, and we have published guidance for councils to stop unjustified, aggressive collection practices.

“However, there is a significant potential source of income which councils across the country could use to support frontline services or freeze council tax bills next year, and this new service should help efforts to recover it.”

peter.walker@ft.com