The Department for Business, Innovation and Skills: Helping over-indebted consumers - Public Accounts Committee Contents


Consumer debt stands at around £1500 billion, and some 11% of the UK population struggle to manage their debts. In 2004 the Government launched a strategy aimed at improving the support to, and reducing the number of people who struggle with unmanageable debt. The Department for Business, Innovation and Skills (the Department) shares responsibility for co-ordinating the strategy with the Department for Work and Pensions and the Ministry of Justice, and is responsible for the strategy's evaluation.

There has been a complete failure to manage delivery of the strategy. No one is in charge of the strategy, groups intended to oversee it have not met, and there has been no reporting on its progress since 2007. The strategy has not been evaluated to assess whether the policy goals have been achieved and the Department does not know how effective the interventions making it up have been.

Since 2006 the Department has also managed a project to provide face-to-face advice for those struggling with debt. The £130 million project is funded primarily from the Treasury's Financial Inclusion Fund, and delivered locally by Citizens Advice and other third sector organisations.

The Department has achieved greater success in managing this particular project, which is delivering more debt advice than planned at a lower cost per person than budgeted. Nonetheless, the project is currently unable to meet all the demand from those users it is intended to help. More people could be reached if the Department better understood consumer needs, the effectiveness of different methods of delivering debt advice, and the most efficient ways of providing advice. In addition, much debt advice is already provided by the private sector and the Department needs to consider both the quality of the advice provided and the contribution that private sector advice could make in the future.

On the basis of a Report by the Comptroller and Auditor General,[1] we took evidence from the Department for Business, Innovation and Skills and HM Treasury on the experience to date of delivering the debt advice project, and how the overall strategy for support to the over-indebted has been managed.

1   C&AG's Report, Session 2009-10, The Department for Business, Innovation and Skills: Helping over-indebted consumers, HC 292 Back

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