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Government is owed a massive amount of money but it has failed to take a strategic cross-government approach to managing that debt and getting more money paid to the Exchequer. Failure to minimise debt impacts directly on Government borrowing. Government inaction has led to large volumes of old debts building up in departments which are unlikely to be collected. While the Treasury and the Cabinet Office say they are belatedly developing a cross-government strategy for debt, we are concerned that the centre has taken so long to drive improvements in debt collection, given that this should be a basic business activity, and given the huge volume of bad debts that are written off each year. The current climate of tight public finances must be an opportune time to make the lasting change to debt management that is needed across government. This will require prompt action to obtain repayments earlier, real co-operation across departments, better data for a more detailed understanding of debtors and their circumstances, and a more strategic approach to the use of debt collection agencies. In this way Government could ensure a more effective approach to preventing, managing and recovering debt.
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