Currently dominated by traditional methods of data management and contact such as letters, bailiffs and court orders, the debt collection methods of local authorities can lead to difficult experiences and suboptimal results and returns, which can also be costly in both time and resource.
In the face of financial challenges and an understandable focus on frontline services, Local Authorities have made steps toward a digital debt collection strategy, but still remain unclear of the effectiveness one could have on cost savings and attempts to recover the deficits that the funding gap has created.
In a survey of 131 Local Authorities within England and Wales last year, 75% shared their lack of confidence in the future of local government finances. With 10% believing they were very close to failing to meet the legal requirements to deliver core services to citizens.
In that same survey 40% of councils and 71% of social care authorities were preparing to make cuts to such frontline services.
Fast forward to the present and we have already seen reports of councils such as Newcastle City announcing proposals to save millions of pounds by imposing an increase to council tax of almost 2% and redundancies in excess of 30 employees. A situation replicated among numerous other Local Authorities nationwide, all who are aiming to recover the deficit in government funding by 2020.
With dwindling workforces, and pressures on adult social care, attempts by councils to plug funding gaps using such methods could see citizen trust in civic institutions reach a tipping point. The most recent Edelman Trust Barometer suggests itself, that post-Brexit Britain is approaching a crisis of confidence in government institutions.
So, what next?
Though service reductions and organisational restructuring may have aided the impact of resource and budget cuts temporarily, as citizens begin to expect a greater level of transparency, accessibility and responsiveness, similar to that received from other organisations that they come into contact with, service transformation projects must aspire to address this change in customer expectation.
As the digital landscape has shifted considerably, changing demographics and rising expectations – business as usual is no longer an option. However rather than seeing this as a barrier, this represents an opportunity.
Our latest white paper, Better citizen experience in debt recovery, examines how and why the collection of debt via simple multi-channel solutions could significantly improve the financial position of local government institutions while delivering a better service to citizens.
