Agenda item

A presentation on the Council Tax debt recovery procedures was provided to the Board by the Revenue Services Manager. This followed a request by the Board for a report to explain the legislative framework governing council tax recovery, outline the procedures applied by the Council for council tax recovery and the use of enforcement agents, and which identified the actions the Council could take to improve the recovery process and the barriers to improvement.

It was noted that the Money and Mental Health Policy Institute (MMHPI) report titled “In the Public Interest?” argued that legislation governing council tax collection required reform and identified four areas of improvement, namely communication with individuals in debt, the speed at which council debt escalated, the over-reliance on automated procedures and lack of flexibility in dealing with debt cases and the enforcement action used. The report clarified and responded to these areas of concern, detailing how the Council managed its debt recovery process.

After the presentation of the report, the following matters were raised by Members:

·         Use of enforcement agents for council tax recovery – It was confirmed that the Council used external enforcement agents to recover debt in cases where the debtor did not engage with the Council and all avenues to obtain deductions (attachment of earnings order, deductions from benefits) had been exhausted with no success.

·         The Council used two external debt enforcement agencies (bailiffs), appointed from April 2025, both entities being regulated by the Enforcement Conduct Board (ECB) and with all their enforcement agents having specialist training in identifying and handling vulnerability and mental health issues.

·         Concerns were expressed about the publicised case in which one of the enforcement agents appointed by the Council had been overcharging in car parking enforcement cases. Officers clarified that this issue was identified by the company concerned, Marston Holdings, after the Council procured them as an enforcement agency and that this case was an isolated software error relating to car parking charges which was being rectified by the company and which had no effect on the council tax enforcement work carried out for the Council.

·         The Revenue Services Manager explained that the Council appointed two enforcement agents in order to monitor and compare the performance of these and for the Council to have more agency in resolving issues through contact with those enforcement agencies.

·         Fairness and consideration in using enforcement action – The Revenue Services Manager reiterated that the enforcement agencies contracted by the Council were regulated and professional. All enforcement agents were fully trained in identifying vulnerabilities, including if necessary to support making referrals to support agencies. It was noted that enforcement agents did wear body-worn cameras during enforcement work so that footage could be reviewed independently if required.

·         It was reiterated that enforcement agents would carry out credit and address reference checks and would undertake a contact programme (telephone calls/letters/emails) before actual enforcement took place. Prior to enforcement agents being engaged, the Council would also provide opportunities for taxpayers in arrears to discuss pay term options to suit individual circumstances.

·         It was noted that Bromsgrove and Redditch Councils had a shared service for council tax recovery with the same officers employed in the department across the two councils having the same policy and adopting identical recovery processes.

·         In referring to the Council’s actions to prevent people falling into council tax arrears, it was noted that Bromsgrove District Council applied a discretionary council tax reduction policy of 100 per cent council tax reduction for eligible residents on low incomes.

·         Members queried why council tax was demanded in 10 instalments as default and asked whether offering a 12 instalment (monthly) payment option could be more convenient for residents. Officers responded that the default option was payment of council tax in 10 instalments over the year; however, the taxpayer could make a request to pay in 12 instalments if the request was made before 15^th April, and if made at a later date, the number of instalments was reduced proportionally.

·         It was further explained that payment in 10 instalments allowed more time for the taxpayer to repay any short-term council tax arrears without reminders or notices having to be issued. Officers advised that the Council received 55 per cent of arrears payments over February and March.

·         Council tax demand – It was clarified that although the legislation allowed the Council to charge a full year’s council tax if, following a reminder notice, the payment of the outstanding amount had not been made within seven days; in practice the Council issued further discretionary reminder notices and would make further attempts to discuss payment options/instalments with the debtor before enforcing a full year’s liability.

·         Debt Recovery Policy Review – Members remarked that the policy should be reviewed every five years but was last reviewed in December 2016. Members were informed that the delay was due to under-capacity within the revenues team and the need to concentrate on the requirement to deliver the Government’s coronavirus funding schemes during the period 2020-2023. The Revenue Service Manager stated that the next review was expected to take place in the 2026-27 financial year.

·         Implementing revisions to the Debt Recovery Plan – It was stated that such revisions as introducing a pre-enforcement protocol and revised debt recovery strategy and processes could be introduced. However, this could not be undertaken at this time, due to limited resources within the Council’s recovery services team (2.54 FTE staff in post managing Council Tax and Non-Domestic Rates enforcement across Bromsgrove District and Redditch Borough). It was stated that this resource-level did not allow officers to do the checks in house and there was reliance on the private enforcement sector to carry this out for the Council.

·         Finance Department Service Review – It was explained that there was an ongoing service review of the Council’s Finance department, which was considering resourcing within teams including the council tax recovery team. This review was expected to be finalised by the end of the 2025/26 municipal year and it was agreed that the outcomes would be reported to the Overview and Scrutiny Board. It was stated that the service review would provide data on whether the in-house council tax enforcement resources required increasing or any changes or restructuring.

·         The number of council tax debtors in relation to Bromsgrove District’s population and the council tax collection rate – It was explained that the Council had generally had a council tax collection rate of over 99 per cent.  As part of its finance planning, the Council assumed a 99 per cent collection rate each year.

·         Some Members expressed the opinion that the review of council tax enforcement and debt recovery was not required given this affected less than 1 per cent of Bromsgrove taxpayers. Officers responded by explaining that this was part of a wider service review of the finance team and following the review it might be considered that no changes were required. Conversely, if any increase in staffing was deemed to be necessary, then a budget bid would be prepared by officers for consideration by elected members.

·         Information was requested on the monetary value of council tax arrears within Bromsgrove District.

·         Members requested that information be provided to Members on the number of people in Bromsgrove on special payment plans to repay council tax debt.

·         A further request was received that the table at paragraph 2.31 of the report should be updated with target dates for each action and scoring of proposals by order of priority, with the revised table to be circulated to Members. In addition, there was a request that there be information provided on how the risk of a potential reduction of council tax income through the transitory period of Local Government Reorganisation (LGR) was to be mitigated.

·         The concern was raised that LGR also presented a risk in terms of what council tax and other support schemes the new unitary authority would put in place for people on the lowest incomes. It was stated that a new unitary authority might decide to implement a less generous scheme than that currently in place at Bromsgrove District Council.

·         It was suggested that there could be performance measures introduced for council tax recovery, for example in terms of how residents in arrears were assisted prior to resorting to enforcement agents.

RESOLVED that the contents of the report be noted.