In Focus Commercial Credit
Enforcement under scrutiny
How enforcement agents are keeping pace with the rise in public debt
Russell Hamblin-Boone Chief executive officer, CIVEA
ceo@civea.co.uk
Our enforcement profession is under scrutiny as policy makers explore ways to improve public debt collection and enforcement. One of the ways local authorities can
recover debts owed to them involves an enforcement agent attempting to take control of goods and, if the debt remains unpaid, removing or selling them to pay the debt. Enforcement is always the last step in the
long process of revenue collection and is intended to collect debt from those who refuse to pay their taxes, while protecting genuinely vulnerable people. Of course, we should all be concerned
by the mounting levels of unmanageable household debt and the impact that has on people. But we will not solve the much bigger issue of a regressive Council Tax and the increasing financial burden by stopping local authorities from using court powers to recover outstanding debt. If we focus on the facts, we can get closer
to the improvements needed for our social- justice system to keep pace with societal change. Council Tax collection in England and
Wales is the envy of the world. Collection rates average 97%, and yet
around £3bn remains uncollected. The value of unpaid debt of all types
collected in 2018-2019 for local authorities was over half a billion pounds. That is a significant sum that would have been passed to the 97% of good payers to subsidise through higher taxes. Of the funds collected, 27% of Council
Tax is allocated to local government and almost 60% of that is spent on supporting
14
There is an expectation that people in debt will be treated fairly and supported as they repay what is owed. We no longer want to stigmatise anyone for getting into debt and we have become uncomfortable with punitive consequences of debt
vulnerable people. So it is important that councils maintain good collection rates to support local vulnerable people. We should not conflate debt collection
and the impact austerity has had upon household debt levels, with the enforcement of unpaid taxes and fines owed to the public purse.
Moving forward with government However, we cannot ignore the shift in society’s attitude to debt and the implications for debt recovery. There is an expectation that people in debt will be treated fairly and supported as they repay what is owed. We no longer want to stigmatise anyone for getting into debt and we have become uncomfortable with punitive consequences of debt. The duty of care on creditors has been
developed in the government’s policy on a breathing space to be introduced in 2021.
www.CCRMagazine.com The breathing space applies to Council
Tax debt, unpaid Penalty Charge Notices and commercial rent for small businesses. In the case of public debt arrears, the creditor is the local authority, and it is, therefore, appropriate for responsibility for a breathing space to rest with these public bodies. It should be applied at the point that an individual defaults on a payment to the council, before enforcement action is instructed and before a court order is sought. But rather than wait for government
policy for the industry, CIVEA members have been proactive in implementing reforms. We have a strong foundation on which to build. Since 2014 the impact has been striking: l Fewer customers have doorstep visits and therefore a much smaller fee is added to their debt. l A reduction in complaints due to the simplified process and fixed transparent fees. l Improved awareness and training in all aspects of vulnerability and the development of specialist staff and teams. l All bailiffs receive externally verified training and the certification process is improved. l And there is significant investment in technology to maintain engagement levels and evidence professional standards within the enforcement sector. The introduction of a compliance stage
in the enforcement process has led to over half of all debt being collected without an enforcement visit. The compliance stage is now the most significant part of the collection process
December 2019
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52