Understanding debt helps control and eliminate debt. Financial aids like our own client tool, Certus, make it easier to track debt and see how effective collection and repayment strategies are. Research ensures you know your rights and meet your responsibilities, but trusted partners can help you manage areas outside of your expertise. This is as true for organisations as it is for individuals and councils can turn this to their advantage.
Financial transparency rules may have failed to create the ‘armchair auditors’ who were expected to pore over government finances, but they still present a chance to set the record straight. YouGov research suggests that people continue to make false assumptions about how their taxes are spent. Instead of relying on the public to seek out the truth, councils should take the initiative by sharing financial information in a helpful, clear and targeted way.
The effect of this is that taxpayers gain an understanding of how the system works. They can begin to make connections between service cuts and unpaid bills, or council tax rises and improved local public services – this encourages them to take ownership of their contribution.
Kent council provides us with a great example of this approach at work. When considering extra funding for policing, they went to the public before acting. Their survey found that 68% of people supported tax increases to fund increased police numbers, giving them a clear mandate for action and showing the public that their views and payments matter.
This kind of approach can also encourage people to engage with their finances. Studies suggest that growing levels of personal debt are making people feel powerless. By giving residents a voice on spending and showing them what their payments achieve, councils can help to reduce this sense of powerlessness.
But when debtors are genuinely struggling to pay, councils must also actively help. They can achieve this by taking the time to understand the circumstances of debt and by communicating effectively with debtors to create manageable payment plans. Using next-gen payment tools can also make it easier for debtors to pay when the money’s there.
Unfortunately, enforcement action remains an essential tool in ensuring repeat non-payers are held to account. So residents must be made aware of the consequences of non-payment, and their rights and responsibilities in such situations.
Charities like StepChange and Citizens Advice have useful information you can share. But here, too, councils can take the initiative by working to identify those struggling with debt, and those who could pay but don't. Doing so will create an opportunity for positive intervention, encouraging struggling residents to seek help and limiting debt enforcement action to those it’s designed for: deliberate non-payers.
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