As ministers discuss whether to allow local authorities to cover the rising cost of social care by increasing council tax, we at Dukes Bailiffs are considering the impact it'd have on councils' poorest residents. I've been thinking in particular about how to effectively recoup those small unpaid balances without unduly pressuring people who want to pay, but can’t afford to do so.
When chasing is counter-productive
After the abolition of council tax benefits in 2013, there was a 25% increase in the number of people taken to court over unpaid council tax – but if you only look at those eligible for council tax support (CTS), the increase was 400%. That’s a visibly disproportionate impact on residents who were already struggling. Councillors like Brighton & Hove’s Ollie Sykes are warning that further changes to CTS will mainly hurt poorer households. The effect of these changes is often made worse by legal costs and interest payments added to council tax arrears during enforcement action. In more serious cases, this can lead to spiralling debts – and I don't think that’s in anybody’s interests.
I understand that councils feel they have to combat their historic image as a 'soft touch' by being firm with people who deliberately avoid paying council tax. However, in cases of genuine financial hardship, it’s my experience that empathy and support is more effective than instant legal action in encouraging payment – particularly for small amounts.
So it's crucial to assess whether enforcement action is strictly necessary. If councils collected payment from payees who receive CTS and are open about their financial situation, rather than immediately sending these cases to Enforcement Agents like us, costs and complaints would be reduced. We’d also see a welcome improvement in the public perception of our attitude to debt.
Assessing available options
I also appreciate that many councils don't have endless flexibility, but one area they can focus on is improving communication. This is so crucial when we're thinking about dealing positively with CTS cases. According to Citizens Advice's report ‘Catching Up’, 75% of people in arrears who spoke to somebody at their council said they weren't very understanding.
Addressing this can be a matter of training and culture change, but it can also be combined with innovative cost-saving solutions. Brent Council’s outsourcing of customer support has now delivered savings of £31m and improved resident satisfaction from 52% to 76%.
At Dukes Bailiffs, we're convinced that communication and affordable payment plans are as essential to debt collection – and in fact prove more effective for smaller balances than legal enforcement.