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Waverley Borough Council Committee System - Committee Document

Meeting of the Executive held on 08/04/2008
A Corporate Approach to Debt Management and Collection




5
Waverley Borough Council

A Corporate Approach to Debt Management and Collection
OVERVIEW

Waverley provides a wide range of services to its community and raises a significant amount of income from a number of sources. Collecting income is a major part of the Council’s business and the following are the main sources of income from debts raised:

- Council tax - 73million
- Housing Rents - 25million
- Non Domestic rates - 30million
- Sundry debts - 5million

The Council takes the payment of this money from our residents and businesses seriously and this document sets out Waverley’s corporate approach. In summary, our policy aims to maximise the Council’s income cash-flow but recognises that flexibility is necessary in cases of genuine hardship in the Borough.
GENERAL PRINCIPLES

The following principles will apply in the management of Waverley’s debts:
    That the citizens and businesses of Waverley have a responsibility to pay for the services they receive and the charges and rents they are liable for;
      The majority of debts owed to the Council are high-priority debts and as such we expect that debtors will give priority to the repayment of these debts over most other debts that they may owe.

      Methods of payment giving the best customer convenience at the lowest collection cost will be actively promoted by the Council.
        Waverley will promote a coordinated approach towards sharing debtor information and managing multiple debts owed to the Council where legally possible.

        Sundry debt will be avoided wherever possible in favour of cash payments upfront.
          Waverley will use its best endeavours to help people who are suffering genuine hardship and to minconsider the impact of debt on them, including minimising the escalation of debts owed to Waverley.

          It is recognised and accepted that the Voluntary Sector including Citizens Advice Waverley and others, have a key role to play in both the prevention of debt and the debt recovery process. The Council will work with Citizens Advice to undertake debt prevention work in the Borough and help citizens with multiple arrears.
          ALTERNATIVE PAYMENT OPTIONS

          Waverley recognises the importance of offering customers a range of payment methods and will continue to invest in improving these. This helps the Council increase its ability to maximise collection of income and ensures that customers are not excluded from meeting their liabilities due to restrictions on the type of payment methods accepted.
            The Council will continue to review the payment methods available to bill payers in order to ensure that it continues to balance value for money with customer expectations, convenience and accessibility. Customer confidence in the payment arrangements available is critical and the Council will endeavour to ensure the accuracy and reliability of its income systems.
            4.minimise SUNDRY DEBTS

            Sundry debts are notoriously difficult and costly to collect and it is important to obtain payments in advance of service provision wherever possible. Guidance for service officers is available to support this approach. The Council may carry out credit checks on customers in appropriate circumstances.
            ACCESS, CUSTOMER CARE, EQUALITY & DIVERSITY

            All correspondence with debtors must be accurate and conducted in accordance with Waverley’s Customer Care Charter. All invoices/bills will be corporate branded and include details of all statutory requirements and:
              Be correctly addressed, including postcode, with the full details of the person(s) or legal entity responsible for paying the debt

              The amount payable, date of issue, due date(s) and a description of the charge;
                The payment methods available including details of payment points including Waverley’s cash office opening;
                  A contact telephone number and name for enquiries in relation to the account; and if different,
                    A contact telephone number for discussing payment arrangements where the
                    debtor has difficulty in paying the account requested.

                    Following the issuing of an invoice, it may be necessary to issue further documentation (reminders or summonses) following non-payment, or because a previously agreed instalment arrangement has not been adhered to. In these instances, the Council will ensure that all the information outlined above is included on such documents.

                    Each debt due will be notified to the debtor promptly and accurate records of amounts due and collected will be maintained. The notification, collection and recovery of a debt will be completed in accordance with the appropriate legislation or internally approved guidelines, as appropriate.

                    Waverley will treat individuals consistently and fairly regardless of age, sex, gender, disability and sexual orientation and to ensure that individual’s rights under data protection and human rights legislation are protected. However, it will consider the merits of each individual case when deciding how to pursue an unpaid debt.
                    The Council will, wherever possible, provide information to meet customers’ specific communication needs. In doing so, the Council will seek to ensure that a customer’s individual preferences are documented and stored on systems in order that future notices can be issued in the preferred format, for example large print to corporate standard.

                    For customers who contact the Council in person or via the telephone, and who require a translation or interpretation service, the Council will ensure that, wherever possible the translation facility, Language Line, is made available to assist those for whom English is not their first language.
                      The Council will endeavour to ensure that documents issued in respect of debt recovery matters meet plain language standards.
                        Documents issued will explain the legal options open to the Council in relation to the stage of recovery the document relates to. Such documentation will also clearly explain what the customer needs to do to avoid further recovery action being taken.
                          The Council recognises the importance of issuing debt recovery documents in a timely manner and will ensure that such documentation is issued in accordance with statutory or internally approved deadlines.
                            The Council will undertake to distribute this policy internally across all service areas and externally on Waverley’s website and amongst stakeholders such as Citizens Advice Waverley.
                            MULTIPLE DEBT
                            SHARING INFORMATION
                              When undertaking recovery of monies due, the Council recognises that the most efficient, cost effective and in some cases the only legal way of recovering these monies is to pursue the recovery of individual debts.
                              We will encourage effective sharing of information within the Council where:

                              staff time and money can be saved when attempting to trace debtors;
                                debtors can be effectively contacted at the earliest possible stage of recovery;
                                  for those debts where the Council has the discretion to agree a Rate of recovery, effective information sharing will result in the Council and the debtor making realistic and sustainable recovery arrangements;

                                  a positive impact on recovery rates, whilst also allowing for more accurate forecasting of recovery rates, and;

                                  it will reduce the chances of further recovery action being taken due to a failure to maintain an arrangement. This will reduce the likelihood of the Council adding to the debtors indebtedness as the debtor will not incur associated recovery charges, for example Court costs and summons fees, further down the recovery cycle.

                                  In recognising these advantages, the Council will continue to explore the most effective and efficient way of sharing information across its services. However, in doing so, the Council will take full account of Human Rights and Data Protection legislation. Where sharing of information is with other agencies, for example CAB, appropriate authorisations from customers must be secured.
                                  FINANCIAL INCLUSION - MAXIMISING CUSTOMERS’ ABILITY TO MEET THEIR LIABILITIES
                                    The Council will widely publicise the availability of any appropriate benefits, exemptions, discounts or reliefs which may either reduce the level of liability for the debt or increase the income of the customer, thus increasing their ability to meet their liability. Such benefits, exemptions, reliefs and discounts include:

                                    Housing and Council Tax Benefits - This means we will undertake proactive take up campaigns annually in partnership with others and we will aim to reach every household. We will also process new claims promptly and to a standard at or exceeding national targets for new claims and changes in circumstances.

                                    Council Tax Discounts, Reliefs and Exemptions;

                                    Business Rates Reliefs and Exemptions;

                                    Working Tax Credit;

                                    Pension Credit;

                                    Income Support & Job Seekers Allowance;

                                    Disability Benefits; and

                                    Discretionary Housing Payments.

                                    The Council will ensure that publicity relating to schemes that will enable customers to reduce their liability is available at all Council offices, on the Council’s Website, Intranet and is regularly distributed in appropriate formats to those stakeholders who are unable to access the Council’s Website.

                                    The agreement of payment arrangements is the subject of guidance and procedure agreed by the S151 Officer. Whilst it is important to endeavour to meet the customer’s request in the event of a reported hardship case, it is also important to ensure a firm but fair approach that provides a reasonable incentive for the customer to clear their debt.
                                    VULNERABLE CUSTOMERS

                                    Whilst Waverley will apply a robust and tough approach to recovery of debts, it also recognises that some customers will require a more sympathetic, sensitive and practical approach to debt recovery. Waverley will endeavour to take account of the needs of vulnerable customers throughout the debt recovery process and will work with Citizens Advice Waverley if necessary.
                                    In undertaking the recovery of monies owed to it, the Council can call upon a wide range of powers to assist in the collection process. Some of these powers are quite severe, and include the ability to impact on a person’s liberty, to evict a tenant, attach earnings and benefits and the right to seize goods belonging to the customer. When dealing with vulnerable customers, the Council will ensure that these powers will only be used when all other options have been exhausted and where all statutory processes have been properly followed.

                                    When applying the debt management policy to the more vulnerable customers, officers will consider the wider implications of any recovery actions on the individual and the Council, such as preventing homelessness.
                                    Difficult to recover and Irrecoverable Debts

                                    The Council will pursue all monies owed to it. This includes externalising debt collection where appropriate. The Council recognises that there will be certain circumstances where it will not be able to collect all the debts owed and that some accounts below a certain value will be uneconomic to collect. Waverley’s Financial Regulations set out the procedure and financial thresholds for processing such debts.

                                    REPORTING AND MONITORING

                                    It is the responsibility of the originating department to take ownership of the debts in their service areas and to ensure effective arrangements for monitoring the payment and recovery are in place. Regular reports on collection rates, arrears levels and approved debt write-offs will be reported to Waverley’s Corporate Management Team. Periodic reports will be referred to the appropriate member Committee.
                                    COMPLAINTS AND DISPUTES

                                    The Council will endeavour to resolve any disputes in relation to debt collection at the earliest possible opportunity and will ensure that debtors are fully aware of the ways in which they can contact the Council in order to discuss any dispute they may have.

                                    Where part of a debt is disputed, the Council will endeavour to collect the undisputed amount at the earliest possible stage whilst also dealing with the disputed debt.

                                    If a customer wishes to make a complaint regarding the way in which the Council has sought to recover a debt, they will be advised of the Corporate Complaints procedure.

                                    Comms/exec/2007-08/281