Gavin Newlands – 2016 Parliamentary Question to the Department for Work and Pensions

The below Parliamentary question was asked by Gavin Newlands on 2016-02-04.

To ask the Secretary of State for Work and Pensions, what his Department’s policy is on using debt collection agencies for collection of outstanding payments.

Justin Tomlinson

The Department’s policy is to recover outstanding debt whenever possible. Where a person is not in receipt of benefit and all the Department’s attempts at recovery have been unsuccessful, the overpayment will be referred to a debt collection agency. The debtor is always given an opportunity to make an agreement to pay the Department before the debt is sent to a debt collection agency to recover.

With the exception of one service provider currently being used by the Child Maintenance Group, the Department does not hold extant, direct contracts with any debt collection agencies although the nature of some of the expired contracts means that a number of collections are still being made. DWP now makes use of one main contract with Indesser. The Framework Contract is managed by Cabinet Office. Indesser manage relationships with a number of Debt Collection Agencies on behalf of all Government Customers.

Under the terms of the Framework Agreement, Indesser and its sub-contractors must comply with relevant industry and public sector standards for service delivery including those of the Credit Services Association, the Code of Practice and the Financial Conduct Authority guidelines. The standards are listed in the DMI Framework Agreement. Indesser reviews subcontractor compliance with these standards through audit and assurance activity, including responsibility for ensuring that they comply with relevant industry standards, managing their performance, and monitoring any complaints. Customer departments (i.e. DWP) in turn receive Letters of Assurance which they review to ensure standards are being achieved and the audits are effective.

The breakdown of figures you have requested is derived from operational processes and systems designed solely for the purpose of helping the Department to manage its business. As it was not originally intended for publication, it has not been subjected to the rigorous quality assurance checks applied to our published official statistics.

The debt collection agency costs of the Child Maintenance Group and DWP are given separately. Please note that the figures are rounded to the nearest £10,000.

The cost to the DWP of the debt collection agencies, and the related recovery made by them, is as follows:

The cost to Child Maintenance Group of the debt collection agencies, and the related recovery made by them, is as follows: