Ahead of tomorrow’s Budget, I wanted to take the opportunity to set out how Registry Trust’s County Court Judgment (CCJ) data can inform policy-making by providing a clearer picture of indebtedness in the UK at a regional level.
The current priority for the Government has to be economic recovery. But, our particular interest is in how data, including Registry Trust data, can help policymakers, regulators, and other stakeholders identify areas of greatest need and target the right policies to build a more sustainable UK-wide recovery. Registry Trust’s historical granular monetary judgments data allows us to learn from previous crises to map which regions and local areas are financially vulnerable.
Our data is real-time which means it can be used to monitor the effect of policy and regulatory interventions designed to mitigate the impact of the Coivd economic shocks on business and household finances. It can also help build credit and wider financial inclusion, so contributing to the inclusive growth we want to see as the economy recovers post Covid-19.
So, what does Registry Trust data tell us? Well, firstly, it could tell us more and provide a much more accurate picture of indebtedness if the CCJ process was improved (see my previous blog about this). As we have called for, and the Woolard Review highlighted (see Lex’s blog on this), if creditors were required to notify the courts of ‘satisfied’ judgments, we would not end up with ‘outstanding’ CCJs on the Register of Judgments, Orders, and Fines, which have actually been paid but not marked ‘satisfied’ due to debtors being unaware of their obligation to notify the courts of payment. We would also have a much clearer picture of the realities of CCJ debts – and therefore much more accurate credit reporting – if we were able to show ‘partial settlements’ on the Register. These are changes that we’d like to see Government and regulators pressing for as a matter of urgency.
Why is this so important? Because availability of affordable credit is key to inclusive economic recovery.
Secondly, Registry Trust data, which can be drilled down to a regional and even local level, shows us where the ‘hotspots’ are when it comes to problem debt and creditworthiness. This can inform responsible lending and borrowing, as well as business and policy decisions, on a regional basis. It can also be mapped against a whole range of other data – from availability of debt advice (see this blog) to child health deprivation (see this blog) – to understand what the wider impact could be in certain areas and develop cross-sector interventions.
The reality is that we are not all ‘in the same boat’ when it comes to the economic impact of Covid-19. Some have been much harder hit than others and, unfortunately, they tend to be those who were already vulnerable. There is also a whole new group of people who have never been in debt before and are now facing financial vulnerability for the first time. We must ensure that this doesn’t lead to a ‘downward spiral’ of further issues as can so often be the case.
Following a significant decline in judgments during the height of the pandemic in 2020 due to forbearance and court closures, we saw a sharp rise in CCJs towards the end of the year. While this pattern was predictable, we weren’t expecting it to happen so soon and it is a serious cause for concern that the increase was so marked and so quick. As I pointed out in this Guardian article, even when the economy recovers from Covid-19, households will still be vulnerable to its after-effects. Helping vulnerable households to rebuild their finances will mitigate the longer term impact of leaving them to fend for themselves. We are watching our CCJ stats carefully to see what happens to judgment levels over the coming months and urge policy-makers to address any warning signs that certain regions are being harder hit than others to try and avoid widening financial inequality as a result of the pandemic.
We very much welcome the short term extension of support measures like furlough which we expect to be announced as part of the Budget, as well as a ‘levelling up’ strategy for different parts of the UK. But, we hope that these interventions will look to address inequalities for the longer term. There is a lot of talk about what Coronavirus has cost the Government and what it means for public debt, but we must first address the impact on individual households and ensure that support for indebtedness is targeted and meaningful.
We currently have two research opportunities available: A Consumer Data Research Centre (CDRC) Masters Research Dissertation Scheme project using our monetary County Court Judgment (CCJ) data to understand the effects of austerity, and a University of Liverpool Geographic Data Science Lab PhD in 'Regional Inequity of Financial Vulnerabilities and Indebtedness over Time.' Find out more here.
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