UK government pushes ‘predictive technology’ in new debt management strategy
The UK government is promoting greater use of predictive technology across the public sector to try to prevent people and businesses from “falling into problem debt”.
The move is among numerous pro-technology measures in the Government Debt Strategy, which sets out plans and priorities over the next four years.
Often referred to as predictive analytics or predictive artificial intelligence, predictive technology uses historical data, statistical algorithms and machine learning to identify the likelihood of a future outcome.
The new strategy – whose full title is 2026-2030 Government Debt Strategy: Prevent, Resolve, Improve – will be implemented by the Government Debt Management Function (GDMF)’s “functional centre”, working with debt-holding government organisations and with input from outside government. The GDMF comprises about 8,000 public servants who work across 40 ministerial departments and arms-length bodies.
As at March 2025, total overdue debt stood at £53.5bn (about US$71.3bn), with recoveries of £102bn (about US$136bn) during 2024/25. This is down from a peak overdue debt balance of £64.3bn (about US$85.7bn) during the Covid pandemic, when government provided essential financial support and “paused regular collection activity”. This pause led to more “aged” debt, which is “typically harder and more expensive to resolve”, the strategy notes.
‘Reducing silos across departments’
The strategy explains how the government “will make the management of debt owed to government more consistent, transparent and fair”, Lucy Rigby, economic secretary to the Treasury, writes in its foreword.
“Government must be an effective creditor – robust in tackling non-compliance, including fraud and criminality, while acting fairly and proportionately,” she notes. “This means supporting those in vulnerable circumstances, taking account of what is genuinely affordable, and helping to prevent financial difficulties from escalating.”
The three priorities are explained as preventing avoidable and problem debt; resolving debt to clear standards – pursuing those who avoid repayment and taking robust action where fraud or criminality is involved; and improving capability through stronger data, digital tools and professional leadership.
The government states that since the 2023 launch of the government’s first debt management strategy – which “provided a common framework for how all government organisations approach debt” – progress has been made in “improving debt resolution practices” and “reducing silos across departments”.
The new strategy was developed “with colleagues across central and local government, alongside experts from the debt advice sector and the wider debt management industry”.
Debt management was established as a formal civil service profession in June last year. The GDMF was relocated from the Cabinet Office to HM Treasury in 2023.
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More analytics, more fraud identified
“Practice has improved, but the current debt picture shows there is more to do together: preventing avoidable and problem debt, resolving debt to clear standards, and improving government’s capability in debt management,” the strategy states.
It acknowledges that the “wider environment” is also “challenging”, with “higher living costs mean[ing] some people and businesses are finding it harder to keep up with regular bills and repay what they owe”.
It also points out that improvements in data sharing and analytics mean more fraud, error and non-compliance are being identified, which increases the volume of debt needing recovery and “requires more intensive action”, including the use of new powers such as those in the Public Authorities Fraud, Error and Recovery (PAFER) Act and HM Revenue & Customs (HMRC)’s Direct Recovery of Debts (a power the department was given in 2015 to recover debts directly from taxpayer bank and building society accounts).
“Policy changes to make repayment more sustainable are also lengthening repayment periods, affecting the pace of recoveries in some areas,” the strategy states, adding that “new forms of debt are arising – sometimes intentional as is the case with loans – that bring new considerations”.
“Digital and data innovation – including self‑service technologies, automation, data analytics and generative AI – is already transforming how we work,” it continues. “These tools offer better insight, reduce administrative effort and improve user experience, enabling earlier engagement, more tailored approaches and greater use of self‑service.”
Priorites and pillars
The new strategy outlines four key focus areas for the ‘centre’: focusing more intensely on building a professional, skilled and thriving debt management community across government and the wider public sector; putting data-led approaches “at the heart” of what government does, including on cost-efficiency metrics and fairness, to better understand risks across the system; better distinguishing how government manages and supports different types of debt, and departments with smaller debt books; and maximising the links with operational delivery and finance functions and professions across government.
The ‘prevent’ pillar of the strategy includes “supporting the development of policy approaches and payment systems that encourage people to pay on time and provide flexibility”. As well as promoting the use of predictive technology, it also refers to “growing opportunities for contact through design, communications and different channels at earlier stages in payment and debt resolution”; and supporting people by “exploring opportunities to support people to budget and maximise their income as part of the debt resolution process”.
The ‘resolve’ pillar states that successful debt resolution is “increasingly underpinned by timely data, enhanced analytics and tailored approaches”, adding that “while parts of government are forging ahead and more debt is now going into repayment plans, there is further to go”.
The government will “promote tailored approaches” by “creating a stronger culture of gathering, maintaining, validating and using data, including from third parties, to inform communications and collections strategies”; and “maximising data-sharing between government organisations, enabling better identification and targeting of activities”.
The ‘improve’ pillar – a reference to “improving government’s capability to resolve debt more efficiently, effectively and fairly” – includes plans to improve innovation in government debt management by promoting and expanding access to digital tools, including the use of AI and analytics, while closing maturity gaps across government; “raise standards and consistency in debt practices, debt forecasting and use of metrics that drive efficiency and fairness”; and ‘build stronger partnerships with the private sector and the Government Commercial Agency to support innovative debt resolution approaches, share good practice, deliver social value and ensure consistent standards”.
Progress to date, as set out in the strategy, includes the piloting of data sharing across government, “indicating a 15% increase in debt resolved and better identification of vulnerable cases, laying foundations for wider rollout”; and “automated data collection and analysis to give a clearer view of risks and trends across the system”.
Read more from our sister title, Global Government Finance: UK government’s ‘debt resolution’ roster puts faith in fintech
Supplier frameworks – latest
The Government Commercial Agency (GCA) came into formal existence on 1 April, combining the Crown Commercial Service (CCS) and experts from several Cabinet Office commercial teams.
The then-CCS completed the creation of a Debt Resolution Services supplier roster that sought to “bring fintech to the fore”, in December 2021.
Known as ‘RM6226’, its webpage explains that “public sector customers [organisations] can access debt recovery and associated services including data, fraud and error, litigation and spend analysis recovery”.
On 12 December 2025, CCS confirmed that part of RM6226 – Managed [Debt] Collection Services – was being extended by 12 months to have a new end-date of 13 December 2026. This is being reprocured as a separate standalone framework (‘RM6402 Managed Collection Services’).
On 19 February this year, a new agreement – ‘RM6366 Debt Resolution Services 2’, which excludes Managed Collection Services – began operation. It has an end-date of 18 February 2030.
This article was originally posted on the website of our sister title, Global Government Finance. Sign up to the Global Government Finance newsletter.
About Ian Hall
Ian is Global Government Finance editor. He has formerly held roles including UK director of Euractiv (2011-2018), editor of Public Affairs News (2007-2011) and news editor of PR Week (2000-2007). He was shortlisted for ‘Editor of the Year’ at the British Society of Magazine Editors (BSME) Awards in 2010. He began his career in the Balkans at English-language weekly the Sofia Echo (Bulgaria: 1998-1999).
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