In a guest post for Thoughts at the Trust, Councillor Max Schmid explains why Hammersmith and Fulham Council has this week announced an end to the use of bailiffs for council tax arrears.
Along with other public bodies, Hammersmith and Fulham Council has had to deal with unprecedented cuts to its funding from central government. The administration has been determined that these cuts from government do not result in worse services for residents. That means that collection of income is more important now than it has ever been. But not at any price.
We know that poor collection practices (especially in an unregulated sector) cause great distress and harm. There is clear evidence that the use of bailiffs causes increased levels of stress and anxiety and puts families under strain. There are significant correlations between local authority use of bailiffs and incidence of families in temporary accommodation (arising from homelessness).
All these effects result in increased demands on critical public services from mental health, to social services to housing to the NHS. These all bring significantly increased cost to the public sector. Looking through a wider value for money lens, then, using bailiffs can cause great damage. Perhaps more importantly, it is not the purpose of local authorities to cause its residents this kind of harm. Quite the opposite, indeed.
Our efforts and achievements in looking after our residents well, are considerable. And is something we take great pride in:
- Back in 2014, the council became the only one in England to abolish home care charges for our elderly and disabled residents.
- We reduced the cost of meals on wheels by more than half.
- In March 2016 the Council’s Childrens’ Services were inspected by OFSTED and found to be in the top three in the country.
- In December of last year, the Council were the first in London to abolish Council Tax for care leavers
- And we’ve also preserved council tax support for those on low incomes
What’s important is that we have achieved all of this whilst cutting council tax and most fees and charges. Indeed, council tax payers pay less now, in real terms, than they did in 1986.
All of these achievements throw into stark relief the fact that we were one of the biggest users of bailiffs in local government. But we are setting out to change this.
In July of this year we launched a new ethical debt collection company, in partnership with 1st Credit, called H&F Ethical Debt Collection. Our mission is, over time, to bring ethical collection practices to every area of our business and to the wider public sector.
We are treating all debt we collect through the new venture as though it was regulated and apply FCA standards as a minimum, with a particular emphasis on identifying, and responding to, vulnerability. We have started collecting debt for Hammersmith and Fulham Council in some difficult areas: written off former tenant arrears and written off parking tickets. In both areas, we are having success collecting and in agreeing arrangements to pay. And we’re doing it in the right way as recent customer feedback demonstrates:
“I have been dodging phone calls for a few months now as I have collection agencies after me with regards to my debt. I was really happy when I answered the call today I had a lovely lady call me and she was the most helpful and friendly and professional person I have spoken to in a long time. I have today been able to arrange a payment plan with no stress and no pressure and I have left that phone call feeling positive for the future. I’d like to say a huge thank you to this lady for the call today and for being the representative for your company that she is.”
Having proved that we can collect the most difficult debts using an ethical approach, it was a very clear next step for us to use the new approach to collect overdue council tax. As a result, we are determined that Hammersmith and Fulham Council will no longer use bailiffs to collect council tax from 1st April next year. We are confident that our overall collection levels will be the same or better and that the impact of collections on our residents, and the wider public purse, will be a significant improvement.
Councillor Max Schmid is Cabinet Member for Finance at the London Borough of Hammersmith and Fulham.
The Money Advice Trust’s new Stop The Knock research, released last week, found that overall council bailiff use in England and Wales increased 14% between 2014/15 and 2016/17 – but four in 10 councils actually reduced bailiff use in that time. Read the report and view our clickable map of local authority collection practices at www.stoptheknock.org