How far should a local authority go to get what it's owed?

 

Not everyone pays their bills. A local authority has a duty to ensure public money is properly managed and this means chasseing up those who don’t pay their council tax, their rent or the money for the services they receive. However the same national news papers that criticise inefficient local authorities for not doing enough to make people pay what they own can also label them as heartless bureaucrats    when pursuing older people for money.

In the current financial climate most authorities have not only introduced charges but significantly increased them for services like home care, meals, transport, day care and residential care. There is a financial assessment which was originally designed to take account of the ability to pay but these days everyone is expected to pay its just a question of how much, which means that there is potential for a lot more debt. 

I was working as a senior manager for a large local authority when it was severely criticised by the auditors for allowing a very large amount of debt to accumulate over a number of years due to non payment by a small proportion of service users. In response the council set up a specialist team to pursue individuals and secure payment. This was largely carried out by sending letters threatening legal action, telephone call follow ups and occasional home visits.

 

Some people were genuinely unaware they owed the money having never been billed, some agreed they owed money but disputed the amount, others just hoped to get away with it. Most did pay up. However two years later there was still a hard core who were unwilling or unable. The council felt they had three options, large scale expensive legal action against people who probably didn't have the means to pay, writing off the debt or selling the debt. The advantage of selling the debt was that we were guaranteed to get some money even though in would only be a fraction of the amount owed but we would be able to close the books. The disadvantage was that once we had sold the debt we had no control over the situation. We might sell to a reputable debt collection company but once they had collected all they could there was nothing to stop them selling the debt on. It was not hard to imagine that the debts of the least able to pay would end up with the less reputable local debt collectors who were not squeamish about the methods they used to get their money.

In the end it was decided to write off the remaining debt having agreed with the auditors that every reasonable means had been used to collect the money owed and that the cost of pursuing this further was disproportionate. Of course being a local council another consideration was the potential for some very bad publicity around being seen to send in the bailiffs or being heavy handed in pursuing elderly, disabled and vulnerable people for money they didn't have.

 

I am not sure the same decision would have been reached in the current harsh financial climate but the debate would be the same.

 

Blair McPherson author of UnLearning management published by Russell House.

Follow Blair on Twitter @blairmcpherson1

 

 

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