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Crisis Loans

Volume 487: debated on Tuesday 3 February 2009

To ask the Secretary of State for Work and Pensions (1) how many people were subject to (a) a county court claim by his Department and (b) a county court judgement as a result of such a claim for defaulting on repayments of a (i) crisis loan and (ii) budget loan in each year since 1997; (249339)

(2) how many people have had items repossessed following default on repayments of (a) a crisis loan and (b) a budgeting loan in each year since 1997;

(3) in how many instances bailiffs have been used to recover repayments of (a) a crisis loan and (b) a budgeting loan in each year since 1997;

(4) how many bankruptcy orders have been issued following default on repayments of a (a) crisis loan and (b) budgeting loan in each year since 1997.

Where a person is in receipt of benefit, recovery is by means of deductions from benefit only.

Court action is only taken against those no longer receiving benefits. Such action is taken only should a voluntary arrangement not be possible, or if there is a default on that arrangement. The Department does not seek repossession of items in default cases, neither does the Department take bankruptcy action.

The information relating to the number of occasions bailiffs have been used is not available.

The number of people subject to a county court claim by the Department for Work and Pensions for defaulting on Social Fund repayments is set out as follows. The information cannot be separated between Budgeting Loans and Crisis Loans. No action has been taken to enforce recovery of outstanding loans through the courts since 2005-06.

Number of court claims in social fund cases

Number

1997-98

14,417

1998-99

12,005

1999-2000

15,619

2000-01

10,688

2001-02

7,861

2002-03

5,878

2003-04

6,009

2004-05

3,792

2005-06

1,076

Note:

Data prior to 2003-04 has been supplied by the courts.

As part of the Department’s programme to bring increased focus to the management and recovery of debt generally, the decision was made to transfer the management and recovery of social fund off-benefit cases to the Department’s specialist Debt Management unit. This commenced in 2005. Referring the outstanding social fund loans to Debt Management has enabled the use of their specialist skills in pursuing recovery from customers who are no longer in receipt of benefit.

This transfer of cases to Debt Management has already resulted in significant recoveries on loans from those no longer in receipt of benefit, without a need to refer for court enforcement.