Consumers turn to debt management as government schemes branded a 'failure'
Consumers turn to debt management as government schemes branded a 'failure'
Thursday 8th April 2010
In a damning report by the Public Accounts Committee (PAC), MPs slammed the government for failing to help the 11 per cent of UK adults who are struggling to pay off their debts.
It found the population's total personal debt stood at almost £1.5 trillion, as people fail to access proper debt management plans.
"The management of this strategy has been a complete failure," said PAC chairman Edward Leigh.
"The government created a myriad of different interventions, 51 in total, but the arrangements for co-ordinating them have not worked and no one has been in charge."
In addition, the committee claimed that, for the first time, the demand for debt advice was higher than the financial assistance available, due in part to the severity and longevity of the economic crisis.
Meanwhile, it appears it is not just the government-supported debt management agencies that have failed to help those with financial burdens.
A report released earlier this year by the Consumer Credit Counselling Service (CCCS) found that over one-third of all consumers who contacted a UK debt charity last year had to be turned away as they were too poor to be helped.
Despite record numbers of people contacting the CCCS in 2009, only one-quarter of those were able to enter a debt repayment plan or Individual Voluntary Arrangement.
The benefits of an effective debt management plan may therefore be imperative to help Britain come out of the red.
News article brought to you by Debt1 – Confidential Advice for Managing Debts
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