The use of information will support a new approach to repayment of debts owed to the state that, ‘while supporting people in difficulty, will maintain a firm approach’, government claims
Departments will share data related to citizens’ personal finances with the idea of helping government “distinguish between financial hardship and deliberate non-payment” of debts owed to the state.
Last month HM Treasury unveiled the new “Government Debt Management Strategy [which] outlines how departments will better use data and earlier engagement” to create tailored payment plans for citizens that owe money to the state.
In response to questions about the kinds of information in scope of the new strategy, economic secretary to the Treasury Lucy Rigby revealed that a range of data related to individuals’ personal finances will be shared between agencies.
“Some government organisations share information to support debt management, including to help assess an individual’s ability to pay,” she said. “Where data is shared, it may include information relating to income, employment and benefits, depending on the purpose, the lawful gateway and the specific debt and department involved. This data can be used as a way to distinguish between financial hardship and deliberate non-payment. Departments and ALBs (arm’s-length bodies) will apply their own policies and statutory frameworks when determining the most appropriate approach to debt recovery, but government guidance on support for those in financial difficulty is available”.
In response to a written parliamentary question from independent MP James McMurdock, the minister added that “any sharing and use of personal data for debt-management purposes is carried out in accordance” with data-protection regulations.
“Where data sharing takes place under the Digital Economy Act 2017, it is subject to the Act’s statutory framework and the Digital Economy Act Code of Practice, including requirements and principles on lawful purpose, necessity and proportionality, security and accountability,” Rigby said.
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The efficacy of the new strategy will be tracked by professionals in the Government Debt Management Function (GDMF), working “in line with the Cabinet Office functional standards and governance requirements”.
“Where monitoring indicates that intended improvements are not being achieved, the GDMF will use established functional governance to work with departments and ALBs to understand the issues and support improvements, including through guidance, sharing good practice and engagement with relevant organisations,” the minister said.
The strategy is centred on three principles, according to the Treasury, the first of which is “preventing avoidable debt” by the improved use of data and more early interventions. The second tenant is that debt issues should be resolved “fairly and consistently, “with repayment plans that take account of people’s ability to pay”.
The final principle is a commitment to “improving skills and technology across departments so debt can be managed more efficiently and compassionately”.
Government indicated that money is owed to the state for “a wide range of reasons”, including unpaid taxes and overpayment of benefits, as well as fines, fees for services, and loans.
The plan for recovering these debts will be focused on “strengthening support for people in genuine financial difficulty” but will deliver “a tough approach to those who intentionally avoid payment or have obtained money through fraud or criminal activity”.
