Agenda item

Fair Debt Update

Minutes:

The Strategic Lead Revenue and Benefits introduced the report and stated that it provided an update to the Committee on the enhancements and initiatives that had been delivered within the Debt Recovery Service, following an external review in 2017 and the Fair Debt Summit in 2018. He stated that work on the project was ongoing, and although much of this development work had paused last year due to COVID-19, progress had continued to be made. He stated that the report outlined the Single View of Debtor, which brought together information from multiple systems on amounts owing to the Council and potential vulnerability. He explained that the report also discussed financial inclusion, which provided additional dedicated officer support to people in extreme circumstances, to ensure they could access the relevant available support. He stated that the team had also adopted breathing space legislation, which provided a pause in recovery action to enable organisations assisting people with their finances time to identify a resolution. He explained that the team were now focussed on early resolution through delivery of effective communications, including delivering the right message, in the right way, at the right time.

The Strategic Lead Revenue and Benefits stated that the report also provided a summary of how the service tailored its approach to provide additional support to residents and businesses throughout the pandemic, whilst maintaining high collection rates. He stated that appendix 1 included the draft Fair Debt Policy, which had been developed in collaboration with Fair Debt Summit attendees and supported an enhanced approach to ensure that those who couldn’t pay were assisted in gaining appropriate support, and those who deliberately avoided payment were brought to justice using all legislative means available.

Councillor Okunade asked how the team differentiated between those residents who couldn’t pay and those who refused to pay. The Strategic Lead Revenue and Benefits replied that the system currently relied on residents contacting the team, but the Single View of Debtor, which was currently in beta, provided an outline of people’s ability to pay, which improved the teams’ ability to appropriately intervene. Councillor Halden felt it was a good piece of work and was pleased to see the team differentiating the approach between compassion and justice. He highlighted point 5.2 on page 65 of the agenda and stated that the Council currently had £1mn of unpaid debts from residents who refused to pay. He queried how many people were included in this figure. The Strategic Lead Revenue and Benefits replied that approximately 200 people owed £1mn of unpaid debts, most of which was long-term outstanding debt. He stated that the team were currently implementing an enforcement plan that took these people to magistrate’s court to undergo a means inquiry. He stated that if they were found to have the means to pay, but still refused then they could be sent to prison for up to sixty days. He explained that the team were building the capacity to do this by recruiting one fixed tem post, which was hoped would bring 20% of the £1mn outstanding debt back to the Council. Councillor Halden queried how the team were using programmes such as Xantura and big data to collect debt. The Strategic Lead Revenue and Benefits replied that the first phase of the Single View of Debtor had worked to collect the necessary data, and the second phase, which was being entered into now, would utilise this information to help those with outstanding debt where appropriate. He stated that the debt collection team would work with other teams, such as the Troubled Families team, to deliver the necessary messages, based on the information provided to them by Xantura. He explained that the historic system simply sent a letter to those people with debt, but the new system would help those in debt by communicating the right message, at the right time, by the right people.

Councillor Kent welcomed the early intervention with debtors, and felt that intervention should start in primary schools. He asked if the Council could engage with local primary schools to ensure they were teaching appropriate debt management lessons. He highlighted appendix one on page 91 of the agenda and asked how the new policy differed from the old policy. He also questioned how the team would work to identify vulnerable people to compassionately collect debt. The Strategic Lead Revenue and Benefits replied that the team had been working on a Vulnerable Person Policy, which would guide the approach to vulnerable residents regarding their debt, depending on their vulnerability. He stated that where residents made contact with the team, matters would be considered on a case-by-case basis to ensure that people had the opportunity to gain the necessary support to enable them to pay their debt. He stated that the team worked closely with internal support and external organisations, and in extreme cases the Financial Officer would provide assistance and could be a conduit between the person owing money and the relevant support.

 

The Portfolio Holder for Finance thanked their Committee for their work on Fair Debt. He stated that the Council would continue to help those who wanted to pay but could not. He explained that the Fair Debt Summit in 2018 had discussed how to help vulnerable people with the IRV and John Cruise, who was a leading practice lawyer working on sensitive approaches to debt collection. He added that the Single View of Debt consolidated a residents’ debt into one holistic problem, meaning they only had to deal with one team within the Council and the problem became simplified. He stated that those residents who could pay but refused were often habitual and routine non-payers, and the Council would work to ensure that their debt was collected and justice served if necessary.

RESOLVED: That the Committee:

1. Noted the initiatives delivered since the Fair Debt Summit.
2. Reviewed and commented on the performance.
3. Reviewed and commented on the draft Fair Debt Policy.
4. Endorsed that the Council uses all legal powers available to it to recover money owed by those who “can pay by won’t” including committal.

 

Supporting documents: