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Councils' 'problem debt': how to offer support to locals

The latest advice trends from Citizens Advice have again put councils in the spotlight. This time, however, local authorities must act quickly to respond, because they’re being labelled as ‘problem debt’.

Focusing on the problemDukes-ProblemDebt

Calls regarding household bills now significantly exceed those regarding consumer credit. Specifically, calls regarding council tax arrears are up 21% year-on-year, and calls about Magistrate Court fines jumped by 39%.

This is alarming for two reasons:

  1. It suggests councils are chasing debts without concern for their constituents.
  2. It implies those constituents can’t talk to the council directly about their debts.

Addressing these is essential, not only from a reputation point of view, but also a financial one.

Delivering information

One of the biggest factors behind the increase is the abolition of council tax benefits, and transfer of responsibility to local authorities. Citizens Advice data suggests that previous recipients of support are disproportionately represented among callers, implying they were either badly informed or poorly prepared for the change.

While budget cuts may necessitate benefit reductions, councils must not neglect to effectively communicate the changes. This can be done through clearer online presentation, advertising or more direct and creative attempts to contact residents; for example using Twitter, text message or email.

The same approach must be adopted for bills that may result in a court summons or fine for non-payment.

Accessibility

To challenge the positioning of councils as ‘the enemy’ and Citizens Advice as the ‘ally’, councils and their representatives must make themselves accessible, approachable and available. That may mean directing more traffic to council-run or council-commissioned advisors.

If given sufficient authority or communication pathways, these representatives can guide non-payers toward affordable repayment plans, unlike Citizens Advice, which simply advises on how to legally challenge repayment demands.

Firm but fair

Councils need the power to continue targeting persistent non-payers, and must not abandon policies of recouping arrears. However, the negative stereotyping surrounding the use of debt enforcers must be addressed.

That means commissioning partners who understand the importance of engagement, and using legal action only as a last resort for those clearly identified as avoiding payments, rather than simply being unable to afford them.

For more information about Dukes Bailiffs ethical debt collection services, contact an advisor today.

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