How are you dealing with persistent Council Tax arrears?

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A recent government report shows that the amount of unpaid Council Tax is growing and has been widely reported in the press.

In England in the collection year 2016/17, £26,039bn was collected which represents 97.2% of the £26,797bn net collectable debt. Over the last three years this collection rate has seen a year-on-year improvement. Given that the net collectable debt increases every year owing to Council Tax rises across the country, this improvement seems, therefore, to depict very good performance under the circumstances. The main problem however, lies with the cumulative amounts left unpaid stand now at a staggering £2.8bn, up by £102m in the last year. It is the collection of these persistent arrears that is proving difficult to tackle.

Criticisms of some Councils’ approach to collections

The Debt Counsellors Charitable Trust recently released their report Supporting local authorities to achieve best practice in the collection of council tax arrears in which it was critical of some councils’ approach in this area.

The report said that Local Authorities are out of step with creditors from regulated industries and several commentators noted that, along with other government creditors, local authorities’ debt recovery practices are far less closely prescribed and monitored than is the case with creditors from regulated industries such as financial services and the utilities. In 2016 Citizen’s Advice noted that; “It is clear that the regulated industries lead the way in terms of rules and guidance governing their debt collection.”

Need for consistency

While the Department for Communities and Local Government has issued fairly comprehensive guidance on how local authorities should collect council tax this guidance does not have the status of the rules issued by regulators. And there is evidence that this guidance is not always being followed. The report goes on to say that although there were many examples of good practice commentators like Money Advice Trust (2015), Stepchange (2015) and Citizen’s Advice (2016), a key difference between local authorities’ debt collection practices and those of regulated industries is that local authorities frequently lack a consistent and informed approach to assessing affordability in setting repayment levels. Callcredit know from working with organisations across other sectors that setting affordable repayment plans is crucial to achieving better outcomes.

Helping Councils adopt best practice

Callcredit work with customers across many different sectors to help achieve better outcomes and we are well placed to help share and implement industry leading collections good practice. We have helped design compliant customer-centric processes through innovation workshops which have been designed to improve customers’ short and longer term debt resolution outcomes.

The Callcredit Business Consulting team consists of professionals from major blue chip institutions and covers all areas of the credit life cycle from Originations, Account and Customer Management to Collections and Recoveries. The team also includes Public Sector managers from areas like Local Government Revenues and Benefits, Health and Education who have delivered consultancy at both a strategic and process level. This gives the team a unique set of credentials to help councils address debt in the modern public sector landscape.

For more information on how our Consultancy Team can help you contact Business Consultant James Rawlins

If you’re a consumer with questions or issues related to your personal credit report, drivers history report, disputes, fraud, identity theft, credit report freeze or credit monitoring services, please visit our Customer Enquiries page for assistance.

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