Government plans to share debt data

Fresh legislation could be introduced allowing Whitehall departments to share details on people and businesses that owe them money, to help cut the Government's losses to unpaid debt.

The move to implement new laws, to be unveiled in a speech by Minister for the Cabinet Office Francis Maude, follows a study which revealed debtors owed cash to multiple departments.

In February this year, the Cabinet Office's Fraud, Error and Debt Taskforce published a review of debt, which found that more than £20 billion was owed to Government, while more than £7 billion was lost through unpaid debt being written off each year - equivalent to more than £400 per working household every single year.

The proposed new measures aim to make it easier for departments to share "appropriate and proportionate" information, enabling them to understand debtors' circumstances, the Cabinet Office said.

It is hoped the changes will lead to swifter action to recover money and reduce losses, with debtors who try to beat the system finding it harder and those in genuine hardship receiving support to clear their debt.

Mr Maude said: "Government as a whole is owed £20 billion, enough to pay for the Olympic Games twice over.

"For years Government has done all too little to collect the huge amounts of debt which it's owed. That's just totally unfair to the hard-working honest people who are paying their taxes and doing the right thing.

"Government holds the data to trace debtors and assess their ability to pay but too often we can't use it. That's why we will act to enable data sharing to catch the cheats, while also understanding who is in real hardship and needs more time or support to pay.

"Because many debtors owe money to multiple departments, I am working closely with other ministers to find ways of aggregating these debts so we recover them in a single action - that would be simpler for Government and the debtor. We have already introduced standard guidelines on assessing a person's ability to pay and will continue to develop a proper, consistent approach."

Under the proposed new legislation, a single legal process will be created for all the appropriate information to be shared in each case. Although some data sharing between Government departments is already allowed, there are at least 80 different legal ways to access different bits of data, each with different restrictions. A consultation on proposals for legislation will be opened next year.