Figures released by the Department for Work & Pensions showed that less than 5% of the debts passed to external Debt Collection Agencies has been recovered since 2008.
The DWP currently employs 6 UK Debt Collection agencies and the have been instructed to recover over 36m worth of debt only circa. £730,000 has been recovered.
Debt Collection Agencies operating on behalf of DWP include CCS Collect, Drysden Fairfax Solicitors, Akinika, Credit Solutions, Fredrickson International and Direct Legal & Collections (DLC)
Government officials are said to be extremely disappointed with the low return which currently stands at 4.9% As a result a new baseline recovery target has been set for 6% for debts placed within their first year.
DWP currently has renewed contracts in place with these external agencies that will run till March 2015 with a possible one year extension optional.
The DWP has said they will continue to use external agencies despite these disappointing figures but it is believed they will review the agencies currently being used.