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Debt Management | Debt Articles


National Debt Management

Like all other major countries, the UK economy relies to an extent on borrowing from various sources. The National Debt is the amount owed to lenders by the British government, and is therefore indirectly our debt as taxpayers.

Increased Debt

The extreme financial difficulties faced within the world economy in the past few years have increased debt for all of us, and the government is no exception. UK National Debt has increased greatly in the last couple of years, due to the economic crisis.

Contributing Factors

This has been contributed to by a number of factors. Firstly, the state will naturally feel the impact of the economic problems faced within the society as a whole.

Debt Management

Spending

Public spending increases at times of financial difficulty due to people being more dependent on the public purse, for example through unemployment and other benefits.

Also, the lower rates of income for both businesses and individuals caused by decreased productivity and therefore turnover means that the state receives less in taxes.

Bail Outs

In addition to the natural costs associated with economic problems within society, the government bail outs of the banking organisations has obviously cost huge amounts of public money, contributing in turn to National Debt.

Management

The United Kingdom Debt Management Office is responsible for UK National Debt, and operates as an agency of the Treasury. The DMO handles public debt management at a national and local level, dealing with local authorities as well.

The DMO also carries out the duties of the Commissioners for the Reduction of the National Debt. The CRND handles the investment portfolios for the UK government, managing investment of public funds.

Naturally, the increased level of National Debt has put the government under pressure in terms of how it manages this, with huge amounts of interest now payable from the public purse. Only time will tell how well this debt will actually be managed.