CSA proposes measures to modernise public sector debt collection

The Credit Services Association (CSA) has set out ten challenges for how public sector recoveries and collections could evolve, to better support people in financial difficulty and improve outcomes for taxpayers.

The new paper, published by the CSA, is titled ‘Ten key discussions in the debate around modernising public sector collections.’

The trade body for the debt collection and debt purchase sector says that the paper is intended to spark constructive engagement across central and local government, regulators, advice bodies and the wider collections sector on what good practice should look like in modern, public sector debt recovery.

Following the recent launch of the Government’s Debt Management Strategy, the CSA was pleased to see Ministers taking collection practices more seriously and investing in the systems, processes and skills of those handling recoveries. But the process of reform to build on this Strategy should continue with further debate and changes that might also help drive more consistent, more accessible and more effective collection practices across the public sector.

The CSA paper invites stakeholder discussion around ten possible opportunities for improvement, including:

• Whether cross-government (and central-to-local) data sharing is working as it should — and whether approval processes are sufficiently swift.
• Why is there still reluctance to embrace modern communications technology, and how can the government engage digitally with appropriate safeguards.
• How the gap in consumer education and awareness can be addressed, including more preventative approaches to debt and arrears.
• Whether enforcement options should be more consistent across departments (and potentially beyond), with appropriate safeguards and transparency.
• What should be considered in the next review of the Government Debt Management Function’s Fairness Charter, including complaint handling and communications standards.
• Whether a universal Priority Services Register (or equivalent) is realistic, and how vulnerability information could be better recorded and shared.
• Whether some government payment data should form part of credit reporting, and what benefits or risks that could bring.
• Whether there is value for the government in debt sales in limited circumstances, and how to assess the trade-offs.
• How government fiscal rules might evolve to support investment in collections capability and outcomes.
• Whether it is time for a new approach to commercial collections and business debt recovery, including tackling avoidance and ‘phoenixing’.

Report author and CSA Head of Policy, Daniel Spenceley, said, “Public sector collection practices have made progress in recent years – and the new Debt Management Strategy is extremely welcome – but the pace of change is uneven. We recognise the challenges that face government, both central and local, when there are gaps in funding and pressure on services. However, the standards seen in the best of private sector collections demonstrate that better practices and healthy recovery rates can go hand-in-hand.

“The tone and content of collections communication is often critical to positive engagement. Some public bodies may be hampering their own ability to secure early contact by starting conversations in a needlessly adversarial way. A compassionate and constructive approach to early arrears communications can improve engagement while supporting those most in need.”