Councils must do more to tackle debt arrears (Guest post)

Ian Biggadike from Agilisys Revenue Collection reports on the latest stats that show council tax arrears continue to rise – and why councils need to act before it’s too late.

Figures recently released by the government show that council tax and non-domestic rates arrears have once again increased in the last year.

The stats show that, as of 31 March 2017, the total amount of council tax still outstanding amounted to £2.8bn, an increase of £102m on the previous year. When it comes to non-domestic rates – business rates if you prefer – local authorities reported the total amount of non-domestic rates still outstanding amounted to £1.3bn, a significant increase of £290m on the previous year.

These figures sadly continue the upward trend that we’ve seen over the past few years and while we have to view the data with caution, it is worrying given the Local Government Association’s statement that councils face an overall £5.8bn funding gap by 2020.

 

Only part of the story

As always, statistics have to be viewed with caution, especially as the overall arrears figures presented by the government only tell part of the story –  they don’t take into account arrears that are under some form of repayment activity , which could make a significant difference to the stats.

Agilisys, for example, are working with local authorities to reduce their arrears portfolios by working with citizens, many of whom are facing severe financial hardship, to agree realistic repayment plans that are robust, sustainable and data driven. This has proved to be a major success with on average over 85% of repayment arrangements being maintained, a figure that Agilisys is extremely proud of.

 

Act now

While we don’t know the true scale of the arrears, the fact remains – given the stats made public – that the figure has increased nationally once again. And, given the financial position of local authorities, where every penny counts, why aren’t they doing more to reduce aged debt arrears? Reduced resources and pressure to collect ‘in year’ debt is often cited as a reason. But if that is the case, why not use a third party with proven success in this area? After all, some proven techniques and outsourced services are ready and waiting to help.

At Agilisys we’ve been working with local authorities to recover aged debt, much of which had been earmarked for write off by that local authority.  In one local council, Agilisys recovered over £700k from debt that had previously been considered uncollectable.

Agilisys has combined the expertise of both public and private sector debt collection experts and used ‘test and learn’ principals to understand best practice for ‘hard to collect’ debts. In return, our local authority partners have received recognition from the IRRV in Excellence in Debt Management, Excellence in Partnership Working and Excellence in Innovation categories over recent years.

The government data suggests a number of councils are definitely getting to grips with aged debt collection, but there’s much more to be done as there are still some worrying numbers out there.

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