Defunct businesses leave council in £500,000 debt. How does this impact the public?
A recent freedom of information request by the Money Advice Trust (MAT) revealed that English and Welsh councils' use of Enforcement Agents has increased by 16% during the past two years. In response to the MAT's request, some sections of the press have been quick to paint bailiffs as Dickensian villains. We at Dukes Bailiffs welcome this challenge as a opportunity to set ourselves apart from the crowd.
Enforcement in context
In a year that has seen council tax payments overtake personal debt as the biggest source of concern for many people in financial difficulty, a wave of anger has been directed at councils for pursuing this debt from struggling residents.
However, taking a closer look at the situation reveals a nuanced picture. Changes to council tax benefits in April 2013 cut government support for residents and put the onus on local authorities to support struggling locals. Unfortunately, this shift took place alongside cuts that slashed council budgets by 10%.
According to figures from The Institute for Fiscal Studies, these combined pressures have caused a spike in councils' problem debts. In this context, and against a long-term backdrop of £10bn of further cuts, it’s little wonder that local authorities need help with their cash flows.
Without help from Enforcement Agencies, councils could not secure the funds they need to operate in the current economic climate. This dependency does not mean, however, that Enforcement Agents should be deaf to criticism. Colin Naylor, Managing Director at Dukes Bailiffs, says that 'the best response to negative publicity is to ensure that Agents are transparent and subject to high ethical standards.'
At present, commentators such as The Guardian consider responsible debt collection to be creditors' responsibility, but most local authorities and businesses have neither the time nor the skills to engage with debtors in this way. Sensitive Enforcement Agents like Dukes Bailiffs offer a solution to this dilemma.
Honesty and trust is crucial in building relationships with debtors. Other companies' mistakes show intimidation to be a weak strategy that is particularly unhelpful when clients' debtors are also primary stakeholders.
We at Dukes Bailiffs are convinced that if Enforcement Agents put time and energy into helping debtors build affordable payment plans, our industry will be seen as a helping hand rather than a clenched fist.
For more information about our ethical approach to enforcement, contact Dukes Bailiffs today.
Local Authorities are coping admirably with central government cuts, but a new report from the National Audit Office suggests that demands being placed on councils may have been underestimated.
The NAO’s latest report centres on the first phase implementation of the The 2014 Care Act, which was introduced to reduce reliance on formal care while encouraging independence and greater individual control of care and support.
Auditors found that 99% of councils were confident of being able to carry out the reforms from April 2015, but there are worrying signs that the burden may be greater than previously expected.
The main task for councils is assessing the demands of carers as part of the government’s broader “new burdens doctrine”, which dictates that local authorities be fully assessed in order to receive accurate, proportional funding from the correct central government departments.
The problem, the NAO suggests, is that the policy is burdening councils with assessment costs, but failing to effectively use, or even share, the information.
The DCLG reportedly estimated the amount of assessments and services that would be required under the new Care Act reforms using current Carers Allowance recipients. However, the NAO calculated that if everyone eligible who had applied for support and hadn't claimed it were to seek an assessment there would be additional costs of £27m in extra assessments and services. That’s 26% of the current budget, and a serious cost to austerity-bound councils.
Claire Kober of the Local Government Association told The Guardian that “funding for recent new burdens, such as the increase in deprivation of liberty assessments and the new local government transparency code, was not received by councils before they incurred new costs. This has added significant pressure on local services.”
NAO head Amyas Morse has called on the DCLG to “use intelligence from the new burdens regime to improve its understanding of the pressures affecting authorities’ financial sustainability”.
While we wait for a response from Westminster, fiscal responsibility is more important than ever. To protect front line services from further cuts, councils must ensure cash flow remains healthy. That means not only implementing new legislation in an efficient manner, but taking the tough decisions and ensuring revenue is collected and managed to maximum effect. For help recovering debts, contact a Dukes Bailiffs advisor today.