Monday, 5 September 2016

Brent plans to take bailiff service in house but with a twist or two

The Brent Cabinet will consider taking debt enforcement in-house as out-sourced contracts end. The aim is for the Council to retain the fees generated by each enforcement warrant issued.

The report suggest that a fairly conservative 17.5% collection rate would cover the costs of the service:

Parking would not be incorporate into the scheme at present.

The first twist is that the Council wants to employ its Enforcement Agents outside the usual borough employment terms and conditions which is something local government unions are likely to oppose. The report argues that other Councils, in order to compete with private debt enforcement firms, employ their workers on a low flat base salary, topped up with performance related pay, which is the industry norm. They argue that one one borough, Lewisham, which offered standard conditions on PO3, lost agents to Croydon when it offered performance related pay.

The second twist is that the agents may not be directly employed by the Council but by an independent trading entity which will be a pilot for changing terms and onditions for other Coucnil workers:

  1. It is also important to note that there is a strong likelihood that as part of the Council’s wider commercialisation agenda, an independent trading entity would be created at some point. If such a structure were created, it would be able to recruit staff on different terms and conditions than those used by the council, and as such may be an ideal vehicle for testing a model such as this, especially in light of the fact that there is no immediate urgency to move the enforcement function in-house. It will also be useful to consider the timing of this; if staff are initially employed by the council and later transferred to a separate entity, the situation is considerably more complex than if they are employed by a trading arm in the first instance. 

The report puts forward  a number of principles for debt collection:

Principle 1 – Clear charges and recovery processes

 We will make debtors aware of the value and nature of debt they owe to the council, and the potential implications if the debt is not paid
 We expect customers to contact us as soon as they receive notification if they wish to dispute a charge or feel unable to pay. 

Principle 2 – Easy and flexible payment

We will accept a range of payment methods and frequencies, and will endeavour to ensure that making payments is easy for customers, aiming where appropriate to prevent arrears occurring by encouraging payment in advance, or Direct Debit payments.
We expect customers to take advantage of the range of payment methods available in order to pay on time, and to contact us quickly if they need to request additional flexibility. 

Principle 3 – Early intervention

 Where practical we will seek to prevent enforcement by notifying customers who fall into debt at an early stage to ensure they are aware that debt has accrued.  
 We expect customers to respond promptly to any contact we attempt to make with them. 

Principle 4 – Clear communication

 We will use a range of communication methods to ensure that debtors know how to make payments, and how to contact us if they are struggling to pay
 We expect customers to tell us promptly if their contact details change, and to be courteous to our staff 
Principle 5 – Support for individuals who demonstrate that they can’t pay
 Where an individual is identified as being in financial difficulty, we will ensure they are referred both to relevant internal departments and appropriate sources of independent advice and guidance. In specific circumstances we may consider setting aside a portion of an individual’s debt in order to prevent exacerbating severe indebtedness
 We expect customers to take ownership of their finances, to engage positively with any support provided, to provide any requested information within the specified timescale, and to comply with the terms of any agreement made. 

Principle 6 – We will take enforcement action where individuals “Won’t Pay”
 We will use a variety of debt recovery methods to collect debts from those that can, but won’t pay, and wherever enforcement becomes necessary, any costs incurred will be passed on to the debtor.
 We will ensure that all enforcement action taken is proportionate, and complies with relevant legislation; but to be fair to those who do pay, and to try to deter wilful non-payment, we will always seek the maximum penalty where an individual commits fraud.
The report considers 'vulnerable debtors' who may be:
●  Disabled people, including those with learning difficulties - where theirdisability specifically affects their ability to deal with their financial affairs 
●  People suffering from serious illness, including mental health conditions - where their disability specifically affects their ability to deal with their financia affairs 
●  People who have difficulty communicating in English – translation servic are available for interaction with the Council, but where someone does not have the support of family members who can speak and read English, they may be more broadly financially excluded, and may be considered vulnerable in some cases 
●  People who have difficulty reading and writing – which is likely to prevent them from being able to read notices or warnings in relation to their debt, and may have caused broader financial exclusion 
●  People undergoing significant changes in circumstances – such as being recently bereaved, or having recently lost their job or their home
The report states that vulnerability does not excuse a person paying a debt but the Council will provide support to avoud undue distress.

The full report to be discussed on September 13th can be found HERE

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