Agenda item

The Revenues Manager outlined the Annual Debt Recovery report for 2018/19. He explained that it included a summary of debts written off in each debt area showing the reasons for write-offs and values, collection performance for council tax and non-domestic rates, level of arrears outstanding and the level of provision for bad and doubtful debts. He went onto say that writing off debts was a necessary function of any organisation that collected money. The Council was committed to ensuring that debt write-offs were kept to a minimum by taking reasonable steps to collect any outstanding monies. When the process failed to recover some or all of the debt then they were considered for write-off. These cases were very much the exception.

Cllr E Seward, Portfolio Holder for Finance added that in terms of recovery of debt, most local authorities did not resort to imprisonment and NNDC did not intend to go down this route either, except in circumstances where the debtor was able to pay but refused to. 

Questions and Discussion

1.    Cllr J Toye referred to Table 3 ‘Housing Benefit overpayments‘ and queried the 211% outstanding against debit at year end, specifically the 12 invoices over £10,000. The Revenues Manager explained that housing benefit was particularly challenging as claimant’s circumstances could change leading to a change in payments. Last year there were several large debts that had accrued spread over three service areas: finance, revenues and housing benefit. In response to the specific issue raised, he said that there were several large cases involving income or capital and sometimes pensions which did distort the overall collection of housing benefit. In response to a further question from Cllr Toye as to whether any mechanism could be put in place to avoid this, the Revenues Manager replied that there were tools that could be used to assist and in the last year the Council had used software to access HMRC records and were able to establish quickly that claimants income had changed in about 80 cases. However, it should be noted that some cases were very old and write-offs may have to be considered.

2.    Cllr T Adams referred to housing benefit and asked whether it was possible to monitor how frequently council error was the cause of overpayment. The Revenues Manager said that 31^st March was the collection rate report date. He acknowledged that there were things that could be changed or improved but said that collection rates were very good and that a payment plan was put in place so that overpayments could be repaid over a reasonable period and the needs of the customer were always taken into consideration.

3.    Cllr Adams agreed that the collection rate was very impressive. He sought assurance that that the team was well resourced enough to maintain this high level of performance. The Revenues Manager replied that three members of staff had recently been lost to other service areas which placed additional strain on the rest of the team. However, it was easier to manage a challenging workload through overtime.

4.    The Chairman asked whether there were any benchmarks that the council used to measure itself against. The Revenues Manager replied there was regular benchmarking against other local authorities. He reiterated that the council was in the top quartile for collection and that all available tools were used to check on claimants – including social media.

5.    Cllr N Pearce asked whether there was any way that the Council could have closer ties with government departments so that information they held could be accessed and the level of overpayments reduced. The Revenues Manager replied that in the case of housing benefit this was already improving and the team now reacted within 9 days. He said that he would like to see a similar response rate in council tax and business rates.

6.    Cllr P Heinrich asked whether it was possible to access a statistical breakdown of debtors and the reasons why. The Revenues Manager replied that this could be done to a limited extent for council tax, for benefits claimants there was more information available – for example regarding their household situation. He added that mental health was a big issue and it could be hard to engage with some people and on some occasions it would have to be reported and support would be provided from the Early Help Hub.

7.    Cllr J Toye referred to direct debit payments and asked whether any more could be done to encourage more business rate payers to switch to direct debit.  The Revenues Manager said that this had been a frustrating issue for many years. There was lots of relief available but many sole traders would prefer to pay by BACs than direct debit.

The Chairman thanked everyone for their comments. He said that the debt recovery rates were impressively high and asked that the Committee’s thanks was passed onto the team. He said that it would be useful to see a trend analysis of debt collection rates over a period of several years. The Revenues Manager replied that there was data over going back over 10 years and that target levels were based on an analysis of trends.

The recommendations was proposed by Cllr P Heinrich seconded by Cllr G Mancini-Boyle and

RESOLVED

To recommend to Full Council:

1.    To approve the Annual Report giving details of the Council’s write-offs in accordance with the Council’s Debt Write-Off Policy and Performance in relation to revenues collection.

2.    To approve the updated Debt Write-Off Policy.

3.    To approve the updated Benefit Overpayment Policy and the use of High Court Enforcement Agents if considered necessary.