Page last updated at 23:19 GMT, Wednesday, 7 April 2010 00:19 UK

Government debt advice strategy branded a 'failure'

MPs said the government's strategy was a 'complete failure'

The management of the government's strategy for helping people in debt has been branded a "complete failure" by a committee of MPs.

The Public Accounts Committee said 51 different projects since 2004 had been uncoordinated, with no-one in charge.

The committee's report said 11% of adults were struggling with debts, with the population's total personal debt reaching almost £1.5 trillion.

The committee praised one initiative to give face-to-face debt advice.

Overall though, the committee's chairman, Edward Leigh MP, was scathing.

"In 2004, the government launched a strategy aimed at improving the support to, and reducing the number of, people who struggle with unmanageable debt," he said.

"No one is in charge of the strategy; groups intended to oversee it have not met, and there has been no reporting on its progress since 2007.

"The strategy has not been evaluated to assess whether the policy goals have been achieved and the department does not know how effective the interventions making it up have been."

'Gleam of light'

The committee's report found one initiative to praise, launched by the Department for Business, Innovation and Skills in 2006, to give face-to-face advice to those in debt.

It described this project as a "gleam of light".

"The £130m project is funded primarily from the Treasury's Financial Inclusion Fund, and delivered locally by Citizens Advice and other third sector organisations," Mr Leigh said.

"The department has achieved greater success in managing this particular project, which is delivering more debt advice than planned at a lower cost per person than budgeted."

However, the report said that even this project was failing to help all those it was aimed at, and more people could be helped if the Department for Business had a better grasp of the best ways to give advice.

A Department for Business spokesman said: "The National Audit Office reports that the government has invested £600m to help people struggling with debt.

"Close to 300,000 people have been supported by the Department for Business face-to-face debt advice project alone, and the committee has recognised that it is well-liked and provides good value for money.

"We are already in the process of reviewing our schemes and will carefully consider the report's findings with other departments across government."

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