Council tax debt: is there an intelligent alternative to bailiffs?

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Enormous financial pressure combined with the need to quickly recover what is owed is a growing issue facing local councils who need to fund vital services. To showcase just how big this issue has become, a recent report by the Money Advice Trust found that council tax arrears accounted for 60% of cases sent to enforcement agents in 2016-17.

To combat this some local councils have resorted to using bailiff action – but as a last resort. While a number of councils including Harrow have sought out an alternative solution to collect arrears and prevent debt accumulating.

Local authorities are often viewed as using outdated systems and processes, resorting to the easy but more expensive option of employing bailiffs to collect debt too quickly.

Head of Service – Collections & Housing Benefits at Harrow, Fern Silverio believes that the public, and the media too, “don’t see the quiet transformation that has occurred in the way local councils have implemented sensitive debt strategies and collection processes to complement their overall collection operations.”

The devolution of Council Tax Support gave local authorities a reason to change and develop a more focused debt collection strategy to include a vulnerability policy and improved customer engagement tactics, while simultaneously reducing costs, saving time and maximising resources.

It’s no longer just about making it easier for citizens to manage payments, but also improving internal processes to better support those in financial difficulty. Many councils need a comprehensive collection process that improves agent productivity by providing the right tools for the job.

For Harrow Council, this meant the introduction of intelligent dialling capabilities at the heart of their debt collection process, which allowed them to measure success according to the number of debtors reached and ultimately, the amount of recovered revenue.

“Our text-based communications [from Esendex] provide customer journeys that mean a debtor can either pay, part pay, ask the Council to contact them or be redirected and signposted to debt advice; in essence, providing a better customer experience and ensuring Council compliance at an early stage with the pre-action protocol recently implemented”.

Council tax smart text

“With debt collections, time is money. To succeed we must maximise our debtor contact rates and engage with our customers in a timely and effective manner and sometimes frequently. Our collaboration with Esendex provides an alternative to both Bailiffs and letters, both of which can cause anxiety and provide no option to engage further due to either stigma, fear or simply because the debtor does not know where to turn to.”

Another City Council that uses Esendex to send payment reminders has found that each SMS campaign prompts an average of 29.4% of recipients to make a payment, of which 87% are conducted through self-service channels.

If you would like to find out more about how we can help local authorities communicate effectively, you can get in touch with our sales team on 0345 356 5758.

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Sean Sutton

I'm the Head of Public Sector for UK and Ireland, helping our team of experienced professionals provide industry knowledge, expertise and ultimately value to our customers.