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Councils behaving badly

07 September 2018

Local councils and other public sector organisations are letting down people stuck in ‘problem debt’, says a report from the National Audit Office.

As well as being detrimental to individuals’ wellbeing, this can cost taxpayers too, as those in debt are more likely to use public services such as mental health services and state-subsidised housing.

The Money Advice Service (MAS) estimates that 8.3 million people in the UK are over-indebted, and 22% of UK adults have less than £100 in savings.

The National Audit Office found that council and government departments act too aggressively towards debtors, rather than treating them fairly.

Some 35% of people seeking debt advice reported being treated unfairly by councils, 32% complained about payday lenders or other short-term credit firms, and 22% complained about high street banks.

There seems to be a general lack of communication, with different debt collection teams sometimes even competing for repayments from the same person. On top of this, only 19% of councils adopt best practice guidelines.

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