131022debt

The government has launched a new public/private debt collection agency for government departments including HMRC, Accountingweb tells us (and thanks to Glynis Millward for reposting it).

Now couple of things here lovely readers…

1) As Mike Fleming commented on the accountingweb site:-

Equifax ltd is owned by Equifax EUA ltd and that company is owned by Equifax Luxembourg (no3)SARL

I do hope that HMRC have carried out the necessary due diligence on their new partners paying particular attention to the Luxembourg connections and if this is Company number 3 how many more are there and what is their purpose? God forbid that it could have anything to do with tax avoidance?

I am of course sure that HMRC have covered this point in their pre-partnership discussions and we all have nothing to be concerned about.

2) The article states; “… at least £22bn was owed to the government and that the approach to collecting debt, such as tax and benefit overpayments, was inconsistent and often ineffective.”

Hmmm, yes, inconsistent and ineffective because the government has got rid of thousands upon thousands of experienced civil servants, so the ones who are left are constantly moved around to cover business critical areas such as self assessment submission and tax credit renewal deadlines.

3) Its been proven time and time again within the public sector departments that use private debt collectors, that they cherry pick the cases they wish to debt collect from such as low level debts experienced by the lone parent claiming tax credits, the pensioner who owes money on their self assessment and other vulnerable groups such as the disabled. The more complex, difficult to collect debts are dealt with by existing civil servants.

4) PCS (the largest civil service union) state that this will cost the taxpayer more in the long run.

http://www.pcs.org.uk/en/news_and_events/news_centre/index.cfm/id/E2CCC35E-6EE5-4380-9B5BEA9549892832

Not that the tories will be worried about that of course; they are experts at squandering taxpayers’ money!

Integrated Debt Services Limited, which is jointly owned by the government and TDX Group (an Equifax company, will provide a single point of access to a wide range of debt management and collection services.

According to the Cabinet Office, the debt collection JV “will use a range of proven and effective debt management services to support debt recovery with a focus on increasing returns, while using detailed analytics so that individuals are treated appropriately and fairly. It will provide government with the ability to access best-value private sector knowledge and expertise and departments are expected to sign call off agreements early in 2015.”

Debt owed to the government stands at some £22.6bn and originates from many sources including unpaid fees, taxes, fines and loans, ineligible benefits or grants and unrecovered costs from court cases.

The service will initially be available to six departments including HMRC, the Department for Work and Pensions, the Home Office, the Student Loans Company, the Legal Aid Agency and the Driver and Vehicle Licensing Agency.

It will also offer services to the wider public sector, for example, local authorities.

The ICAEW Tax Faculty noted how the government has already been using private sector organisations for debt collection, which has been found to achieve significant improvements in recovery yields.

“The idea of the new cross-government service is to achieve further improvements by offering one consistent debt recovery tool for departments,” it said.

In February last year the National Audit Office said at least £22bn was owed to the government and that the approach to collecting debt, such as tax and benefit overpayments, was inconsistent and often ineffective.

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