The Fairness Group has issued a joint public statement as it sets out how the government will work with the advice sector to support vulnerable people and those in financial hardship.
The Fairness principles are aligned to Financial Conduct Authorities (FCA) guidelines on Treating Customers Fairly. These Principles are embedded in the Cross Government Debt Management Strategy and the Debt Standard.
The aim is to continually improve how government interacts with people in debt, particularly those in vulnerable circumstances and/or experiencing financial hardship by:
● understanding the impact that debt collection practices can have and how to improve them
● implementing a joint programme of work to further examine practices in central and local government debt management which support vulnerable people, and make evidence-based recommendations for change
● applying Fairness Principles to government debt management, in line with sector best practice
● balancing the statutory and societal obligations of government to collect debts and ongoing liabilities, and prevent fraudulent activity, with the need to ensure fairness
The government has been building closer working partnerships with the advice sector since 2016 to create the Fairness Group.
Kevin Foster, Minister for the Constitution “I am pleased to announce a joint statement on how government and the debt advice sector work together to continually improve how we interact with people in vulnerable circumstances.”
“The Cabinet Office plays a vital role in setting the strategy to ensure those who can pay their
debts do so on time, whilst providing proportionate support to those who need it.”
StepChange Debt Charity responded to the Fairness Group Joint Public Statement, welcoming the government’s commitment to improving government debt collection practices.
Peter Tutton, Head of Policy at StepChange Debt Charity, said “It is heartening to see the Government’s commitment to bringing local and national government debt collection practices in line with both industry best practice and the Government’s own fairness principles.”
“StepChange knows the importance for those in financial difficulties of getting the right help and forbearance from creditors in reducing debt harm and supporting recovery from problem debt.”
“Unfortunately, government debt collection practice does not always match best practice, so this commitment from Government is a significant stepping stone to matching standards of fairness we see elsewhere.”
“Now this statement needs to be supported by lasting change; such as Government accepting the recommendations made last month by the House of Commons Justice Committee on introducing independent regulation of bailiffs’.
Peter Wallwork, Chief Executive of the Credit Services Association (CSA) “The aims of the Fairness Group in bringing central and local government, the debt advice sector, and the debt collection industry together are to be welcomed.”
“What is particularly welcome is the stated desire to continue to improve how government interacts with people in debt, especially the vulnerable. We are fully supportive of the need to apply Fairness Principles to the collection of all debts, in line with industry best-practice, since it not only reflects our own strategy of achieving a level playing field (i.e clear comparability between government and non-government debt) but will also enable the public sector to benefit from the best-practice experience and learnings of our own members.”
“It means the customer will be treated fairly and consistently across every part of the debt collection sector. The challenge now will be whether the government will be able to put into practice its well-stated intentions, and the CSA will continue to work with other members of the Group to help government achieve a successful outcome.”
Joanna Elson OBE, chief executive of the Money Advice Trust, the charity that runs National Debtline and Business Debtline, said “The government’s commitment to improve fairness in debt collection across central and local government is very welcome. Public sector debt collection practices should set the gold standard, but it has been widely recognised that there is a significant amount of work to do to realise this ambition.”
“The public statement published by the Fairness Group today rightly recognises the need to balance the interests of the taxpayer with ensuring that debts are collected fairly from people in financial difficulty – and particularly those who are in vulnerable circumstances.”
“The next step will be to translate this commitment into real action for the people our debt advisers help day in, day out.”
“We look forward to working with our partners on the Fairness Group to develop evidence-based recommendations that will improve the way that the government interacts with people in problem debt.”
Gillian Guy, Chief Executive of Citizens Advice, said “Unfair and aggressive debt collection has a serious impact on those in financial difficulty. We’re pleased government is looking to improve these practices and collaborate more with the money advice sector.”
“Through the Fairness Group, we will continue to share our evidence on this problem and work to ensure the collection practices used by government are as fair as possible.”
“This group, and the MHCLG led review of council tax collection, are good starting points for the government to take urgent action to improve debt collection practices. It must use the review to fundamentally reform the outdated regulations governing how local authorities collect debts.”
“These changes, such as making sure people aren’t forced to meet the cost of their entire annual bill after a single missed payment, are necessary to ensure councils have the flexibility to help people get their finances back on track.”
Caroline Siarkiewicz, director and debt advice expert at the Money and Pensions Service said “The Money and Pensions Service welcomes this Public Statement which sets out how government intends to work collaboratively to help people with debts owed to the public sector. We would encourage government to use The Standard Financial Statement (SFS) which offers best practice on how to assess affordability of repayments but which is only used by 19% of local authorities and is not currently used as standard by central government creditors.”
“We work closely with the Cabinet Office and look forward to supporting further improvements via The Fairness Group.”
The Fairness Group was developed through cross-government collaboration with Citizens Advice, StepChange, Money Advice Trust, The Money and Pensions Service, Credit Services Association, PayPlan and Indesser.