Skip to content
All posts

A Review of the Debt Sector

Ahead of the GovDebt Conference on 11th October our chair Russell Hamblin-Boone looks at the current issues in the sector and gives a taster of the conference.

It is clear that, in respect of recovering local authority arrears, we are a long way from business as usual. Many councils have yet to fully lift moratoriums on debt recovery and reinstate enforcement action at or near pre-pandemic levels.

The expectation was that, with high demand for support services, local authorities would urgently need to address the arrears that had accumulated as a result of the pandemic. For several reasons this has not been possible and budgets are depleted. Therefore, it is timely for this conference to consider the challenges posed to local government finance.

During the pandemic, enforcement agents had received additional training in anticipation that they would encounter a broader range of vulnerable people with debts. Firms themselves have invested heavily in technology that improves their ability to identify individuals’ circumstances and plan appropriate interventions. However, geopolitical events have impacted on the domestic economy with the ‘working poor’ being most affected. Consequently, councils have had to respond to debt recovery with caution.

There is a strong economic and social case for enforcement. Our seminal report Reflection and Collection, the evolution of civil enforcement describes the need for compassionate enforcement as a response to the post-pandemic landscape. This does not mean that enforcement should be suspended but recognises the need for discernment to ensure that people are supported according to their circumstances and type of debt. Enforcement agents are skilled at assessing situations and deciding the most appropriate way to respond to individuals.

Inevitably, the topical debate about household debt has led to proposals for nationwide debt write off and enforcement action amnesties. Others argue that this would just delay the inevitable and create consolidate problems. The focus must be on working with the government to ensure responsible enforcement and to improve public confidence in debt recovery.

In support of the industry’s work to raise standards and promote good practice, the Enforcement Conduct Board (ECB) is due to be launched in November and a board of directors with a range of experience and expertise has been appointed.

The framework document drawn up by the joint industry-debt advice working group provides the blueprint for the ECB. Aside from designing a funding levy that is proportionate and fair, the priorities for the ECB now are ensuring that supervision covers the broad range of enforcement activity. We need an independent review and analysis of enforcement work that is robustly evidenced, so that any recommendations are a direct response to problems identified. We are especially keen for the ECB to be able to monitor trends and issues by managing the complaint adjudication process for enforcement firms.

There will need to be extensive consultation with the ECB and its directors as its working methods are developed and CIVEA will play an important role in providing expert advice. This conference is a timely opportunity for us to consider how we rise to the unprecedented challenges of the past few years with a wide range of experts and commentators. I hope you find the experience enlightening and constructive.

Join us on 11th October at etc. venues St Pauls, to hear from Russell Hamblin-Boone and industry leaders and finance and debt professionals from across the UK. 

New call-to-action