Flintshire Council apparently loses plot by admitting bringing bailiffs in-house would turn round a profit

[outlawla]

News North Wales reports that Flintshire Council bailiffs could be used to recover debts, but disturbingly admits that it estimates to make a surplus of £100k over costs.

 

"The council would have more discretion and control and could create profit for the authority – an excess of income over costs.

 

“If we employed our own, that could provide an income of £100,000 a year. It would also be in keeping with our anti-poverty strategy.”

 

The article doesn't provide a link to the Cabinet report but there is one below for anyone wishing to verify NNW's story.

 

CABINET Tuesday 15th JULY 2014

 

ENFORCEMENT ACTION FOR THE RECOVERY OF COUNCIL TAX AND NATIONAL NON DOMESTIC RATES

 

"

The council will benefit from the substantial surplus generated by fees providing the council with an income stream from fees charged by the EA service

.....

 

"

5

.

02

An internal EA service would provide an income surplus over costs of a minimum £97K per year

.

[brassnecked]

Are they even allowed to turn a profit from enforcement of council tax?

[josephbloggs]

Well the fees are set in stone. And they arent going to want to turn a loss are they. And doing it this way. -no one can by pass the bailiffs and pay the council ever because the fees will remain on there. Where as if someone waits until the account has been returned to the council if its a private company they aint got pay the fees.

[outlawla]

Are they even allowed to turn a profit from enforcement of council tax?

 

Considering below, I should think not, or would likely to be ruled unlawful by the High Court if challenged.

 

Council Tax prosecutions hit new high as benefit reforms take hold

 

Controversial reforms to the benefit system have highlighted, inadvertently of course, local authorities inappropriately generating income from enforcing council tax to meet expenditure in its general administration.

 

It comes in the light of the High Court ruling against Barnet Borough Council [see link below] which had budgeted for a surplus of income from residential parking schemes to be used to meet other transport expenditure. There are similarities between this and how councils use income generated from court penalties to pay for administering Council Tax...

Attfield, R (on the application of) v London Borough of Barnet [2013] EWHC 2089 (Admin) (22 July 2013)

[lookinforinfo]

I suppose it depends upon how the income figure of £294,081 is arrived at.

Is that the amount of council Tax that is outstanding for this year only or overall?

 

Are they including the £75 and the £235 in the equation.

 

What percentage do they think that their work on the phone etc. prior to sending out letters of enforcement will recover

if that is included in £290000+ figure.

 

The Council do seem to try and avoid the use of EAs under the new legislation. And it would seem a better idea for them

to do so since the Council gets all the £75 and the £235 and gets whatever is paid straight away. The only surprise is

that more councils are not going down this route since Flint seem to be acknowledging that EAs are not good at

identifying those who vulnerable. Some thing that we already know too.

 

The bailiff companies have noone to blame but themselves if this practice becomes more widespread as they have historically ignored the mavericks among their staff . Probably too late now for them to clear out their Augean stables.

Oh dear how sad!

[outlawla]

What seems to be the biggest factor surrounding Flintshire's decision to bring bailiff services in-house is that the legislation provides that fees and charges are to be taken before the original debt (unlike when outsourced) and has discretion even in whether those fees are applied.

re "

Although fees are statutory a decision could be made on a case by case basis to reduce fees payable

".

Whether Flintshire has interpreted the law correctly is another matter, it certainly appears not.

 

Paragraph 3.02 of the report suggests it hasn't fully grasped how payments are to be distributed with respect in-house enforcement as opposed to when outsourced. It states there that:

"

the new fee structure is statutory, with payments being offset against charges first

".

There's no indication that it is making this statement with reference to in-house but to how payments are offset when contracted out. However, this is not the view most Local Authorities share which is that the law states that the payments are distributed pro-rata.