StepChange Debt Charity welcomes Work and Pensions Committee report on local welfare safety net

12 January, 2016

In response to House of Commons Work and Pensions Committee report on the local welfare safety net (released January 12th), Francis McGee, Director of External Affairs at StepChange Debt Charity, said:

“Aggressive debt collection by councils is a long-standing issue, but the introduction of localised support schemes for Council Tax support has created an even greater problem. Some of the most financially vulnerable people in the UK are now liable to pay Council Tax, and those who fall behind are subjected to bailiffs, court action and the addition of fees and charges that simply deepen their existing financial problems.

“There is currently a major gap in the protections available to people in debt and the Committee’s proposal that the government consult on a ‘breathing space’ scheme is very welcome. There is a clear need for a new scheme that allows people in temporary financial difficulties sufficient time and space to recover their situation by delivering effective protections such as freezes on interest and charges and a halt to enforcement action.

 “With millions of people living on a financial knife-edge and consumer borrowing rising at its fastest rate since the economic crisis, the government needs to look seriously at the protections that are available to people in debt. Last year, it was announced that HM Treasury and the Insolvency Service would complete a review of the ‘legal framework for debt administration’. This review is yet to take place, but it provides a crucial opportunity to deliver better protections for people in financial difficulty and to ensure that short-term struggles do not become long-term intractable debt problems”.