Problem Debts Costing Taxpayers £900m a Year, Audit Office Warns

September 6, 2018

The scale of problem debts among consumers across Britain is indirectly costing taxpayers close to £900 million on an annual basis.

That’s according to the National Audit Office (NAO), which has warned the government that its departments ought to be doing more to bring down the costs to the public purse of problem debts across the country.

The NAO cites Money Advice Service figures in suggesting that there are 8.3 million people in the UK who can be considered over-indebted and 22 per cent of adults with less than £100 set aside as savings.

Among the consequences of this situation are that many extra people rely on help from publicly-funded services, particularly in the context of mental health and housing support.

The NAO says that while the government “is taking a thoughtful and well-intentioned approach” to tackling over-indebtedness across society, its view is that there is “further to go before value for money is secured”.

Part of the problem is that issues with debt “have not stood still”, the audit office has said, pointing out that the nature of the concerns people have about debts are changing as time goes by.

“Utility providers and the public sector have emerged as major components of debt problems,” a statement in the NAO’s list of report conclusions explains.

“The information available in these areas is, disappointingly, much less coherent or transparent than commercial debt information,” it said. “There are also crucial areas, such as debt collection, where public oversight lacks impact.”

According to the audit office’s research, as many as 40 per cent of the UK population struggle to manage their finances on a day to day basis and more than half a million people are in need of support in dealing with debt but can’t currently access it.

“The National Audit Office hits the nail on the head,” said Phil Andrew from the debt help charity StepChange in response.

“Poor debt collection practices that fixate only on getting as much money back as quickly as possible are counter-productive and ultimately harmful,” he said. “The government is simply robbing Peter to pay Paul.”

If you live anywhere in Scotland and you’re struggling to cope with problem debts then Scotland Debt Solutions may be able to help. You can contacts us directly to arrange a FREE and confidential consultation any time.

John Baird

Insolvency Adviser

Tel: 0800 063 9250

Related News