Headlines: October 24th, 2012

New legislations will allow government departments to share information on people and businesses that owe them money. This will allow information which departments already hold to be used get a clear picture of the debtor and the prospects for recovering the debt.

It is estimated that over £20 billion is owed to government and that more than £7 billion was lost through unpaid debt being written off each year. That is equivalent to over £400 per working household every single year.

The plan to legislate comes after a study revealed that debtors owed money to multiple departments. The new law will make it easier for departments to share appropriate nformation, allowing them to understand debtors’ circumstances so that more effective and intelligent action can be taken to recover money and reduce losses. Debtors who try to beat the system will find it much harder while those in genuine hardship will get the support they need to clear their debt.

Although some data sharing between government departments is already allowed there are at least eighty different legal ways to access different bits of data, each with different restrictions. The new legislation will create a single legal process for all the appropriate information to be shared in each case. A clearer process will also allow better security so we can be assured that the right person gets the right information and nothing more. A consultation on proposals for legislation will be opened next year. This will be one of a series of measures to tackle debt owed to government.

Other measures include the collation of data on each department’s uncollected debt in the Quarterly Data Summaries which are published online so everyone can scrutinise Government’s work to address this.

Guidance will be given to the major debt departments to ensure a fairer approach to those who have fallen into debt but cannot afford to pay it back. This is intended to situations like those where one single mother was chased by 22 different parts of Government.