Sep 6, 2018

Failure over problem debt costs taxpayer £248m

The government's failure to tackle problem debt is costing the taxpayer a quarter of a billion pounds a year, according to the National Audit Office. How it treats people with problem debt makes it more likely they end up in state-subsidised housing, says the NAO. It says government bodies often use intimidation and additional charges to deal with problem debts. Increased use of social housing - £225m. Increased use of NHS services - £24m. But it adds that the wider costs to the economy of problem debts, such as increased dependency on a wide range of public services, informal care, and lost employment, run to £900m. Frank Field MP, chairman of the Work and Pensions Select Committee, said the level of private debt owed to government was "a sorry indictment of the benefits policy". "An HM Treasury Spokesperson said it was taking action on problem debt:"We're increasing funding for the Money Advice Service to over £56m enough to help over 530,000 people get the debt advice they need. Amyas Morse, the head of the NAO, said: "The Treasury needs a better understanding of the scale of people's debt problems and how it is impacting their lives and the taxpayer so it can effectively resolve the problem."

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