Are you a Charge-payer facing Recovery and Enforcement action, for unpaid Council Tax or Business Rates? Or a Local Authority or Enforcement Agency/Agent looking to increase engagement retention? – whichever you are, appropriate and effective recovery of Local Taxation arrears affects you! – but in today’s climate, just how effective are yesterday’s tools to recover tomorrow’s arrears?
Council Tax arrears are now the most common problem debt faced by thousands of households across the country. This is even more problematic than any other household debt, simply due to its legal standing as a priority bill and how accounts in arrears are handled by Local Authorities. This being by way of some very hard-hitting recovery procedures, governed by legislation. For businesses, the handling of Business Rates arrears can often mean the difference between continuation of trading or closing the business down.
For many households and businesses alike, there can be many challenges can slow down, or prevent, any kind of progress being made to address debt;
|The simple term “Priority”||Can be misinterpreted, but each interpretation is an individual to the person or household. This is not just a lack of understanding – for many, it’s the basics (food/heating etc..) that come first|
|Non-Priority creditor contact||Debt’s noticeably more persistent “auntie” – multi-vehicular contact can pressure people to deal with non-priority issues first, leaving the more “parental” priority debts unaddressed, or even impractical|
|Balancing the priorities||“Do I pay the new Council Tax or Business Rates instalment, or do I pay the Enforcement Agent for the arrears?” – a regular in low-income scenarios|
|Vulnerabilities||Mental Health, Physical Health (incl. disability), and the Unemployed – all vulnerable situations. The Ministry of Justice’s Taking Control of Goods – National Standards (April 2014) lists just eight categories. We believe there to be far more than this.|
Just a side note on vulnerability: Whilst there is seemingly no apparent global protection for individuals or households who fall into a recognised vulnerability category, there are some local policies, where individual Authorities have put in place specific procedures that defines what should happen if an individual or household presents as vulnerable.
The Route to a Solution
Libranox are very clear on Council Tax and Business Rates arrears being a priority and legal requirement – however, what should be considered, and all involved must ensure does not happen, is that the individual, household or business is not being pushed into an “at-risk” position of further debt accrual – especially if it means payments of priority rents / utilities, future Council Tax/Business Rates billing would be affected – by not considering the wider situation for those parties.
It is in nobody’s best interests to impose high-risk arrangements if it places rent payments, or conditional rent arrears payments at risk and an eviction scenario arises. Should such a scenario occur, Council Tax/Business Rates falls further down the priority list and that person or business suddenly disengages from all communication. Thankfully, this type of scenario is few and far between but the concept of pushing someone into a more challenging predicament must be avoided.
Engagement between Local Authorities and Charge-Payers is a big issue, especially where there are outstanding arrears to be addressed. This can be linked to a mindset, or belief, that nobody wants to listen to the broader situation. Unfortunately, this stems from the heart of Local Taxation legislation where it is documented that there are very few recognised legitimate reasons for non-payment.
The Call to Action
Libranox understand both sides of the argument, and would like to work with Local Government and the Enforcement Industry to look at ways in which improved engagement can be encouraged, simply by altering the approach and language used within existing recovery and enforcement processes. Whilst there is simply no justification for the “Won’t Payer”, more could and should be done to hear the “Can’t Payer”.
Nobody wants to be in debt. Nobody wants to be woken up at 0600am to an Enforcement Agent knocking at the door, but individual circumstances must be appropriately considered if arrears settlement and indeed maintenance of regular billing instalments is to be more successful, going forward.