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Attempts to collect debts slammed

The Government has been strongly criticised by MPs for failing to collect billions of pounds in unpaid debts.

The Commons Public Accounts Committee accused ministers of failing to take a strategic approach to the issue after the National Audit Office calculated that, as of March last year, at least £22 billion was outstanding in overdue debt.

The majority – £15 billion – was owed to HM Revenue and Customs with the Department for Work and Pensions and the Ministry of Justice accounting for most of the remainder.

“The Government is owed this massive amount of money but it has failed to take a strategic, cross-government approach to managing that debt and getting more money paid to the Exchequer,” said the committee chair, Margaret Hodge.

“Instead its treatment of debt has been characterised by neglect and periodic large write-offs.”

In its report, the committee warned that failure to minimise the volume of debt outstanding – ranging from unpaid fines and taxes to overpaid tax credits – was having a direct impact on Government borrowing.

“Government inaction has led to large volumes of old debts building up in departments which are unlikely to be collected,” the committee said.

“While the Treasury and the Cabinet Office say they are belatedly developing a cross-government strategy for debt, we are concerned that the centre has taken so long to drive improvements in debt collection, given that this should be a basic business activity, and given the huge volume of bad debts that are written off each year.”

A Government spokesman said the Government had succeeded in saving £6.5 billion through its efforts to tackle fraud, error and debt.

“Before 2010, Whitehall did not know how much overdue debt was owed to government and departments weren’t working together to address it. We are turning debt management around but hard-working people expect us to do more and we will,” the spokesman said.

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