Decision details

The Committee received a report on the Corporate Debt and Income Maximisation Policy from the Deputy Chief Executive and Director for People and Communities.

Mr. Aubrey, Deputy Chief Executive and Director for People and Communities, provided a brief overview of the report, advising that Cabinet had approved the commencement of an eight week consultation period for the Corporate Debt and Income Maximisation Policy, as detailed at Appendix 1 of the report.  The Committee were invited to provide comments as consultees.  Mr Aubrey highlighted that details about sundry debts had been circulated to Members via email (for background information) and hard copies of the email were available at this meeting;

A Member asked how much debt had been written off by the Council and how performance had improved since the Debt Officer post had been in place.

Mr. Aubrey advised that the amount of debt would have to be confirmed outside this meeting, as the information was not on hand.  Bad debt provision had been increased and the Debt Officer post had been in place for around two years.  The focus had been on collecting current debt and in year performance on collecting the current debt had improved from around 77% to around 85%.

During discussion the following points were noted:-

·         Over half of the Council’s debt was in respect of housing benefit overpayments.  Members raised whether this was in any way as a result of Universal Credit problems.  It was important to be realistic about the likelihood of recovering this debt.

·         Members queried whether there had been an increase in council tax support to vulnerable people and if this had contributed to them having greater debt arrears.

·         Members wanted to be reassured that the Council provided help, support and intervention for vulnerable people and were pleased that this had been addressed in the Policy.

·         A Debt and Income Maximisation Policy was needed.  However, consideration should be given as to why the Council’s level of debt was so high and this in turn needed to inform the Policy, to ensure it was fit for purpose.

·         Members enquired about the Council’s debt, whether it had been growing and whether officers had been chasing the debt or if it would be written off.  The Council should put every effort into recovering monies owed to it.  (The Chair highlighted that the Council aimed to maximise its debt recovery and that this was the purpose of the Policy).

·         Payment up-front and withdrawal of service, as detailed at paragraph 3.6 of the report was positive.  It was noted that payment up-front was not appropriate for the Lifeline service and withdrawal of service only applied to discretionary services.

·         Members noted that the Council had a high number of debtors opting to make payments via direct debit and that the Council aimed to increase this number further.

·         The ‘balanced approach’, as detailed at paragraph 3.7 of the report was welcomed.  Help and support must be given to people but action, including court action should be taken when necessary.  In certain cases, it would not be cost effective to pursue a debt.

·         The Council needed to understand the reasons why people found it difficult to make payments on time and whether this was caused by poor money management.  Consideration should be given to make it more accessible and easier for payments to be made throughout each month (such as through a phone app), as it appeared that money was being spent before direct debit due dates.

·         Prioritisation of the recovery of debts, which related solely to the Council, as detailed at paragraph 3.5 of the report was noted.  This aimed to maximise the Council’s debt income.

·         Most Members agreed that writing off the debt of a deceased person was appropriate.  The Director for Corporate Services had delegated authority to write-off irrecoverable debts up to a limit of £2,500 (in consultation with the relevant Portfolio Holder).  Debts over £2,500 would be reported to Cabinet.

·         Members noted the six years limitation which applied to much of the Council’s debt.

·         Members raised the current review of the Council’s financial system Oracle, commenting that the system had cost a lot of money and requested further information regarding  the value for money test in relation to moving to an upgrade/new system.  Members were advised that the system had been procured by four of the Council’s five partner councils.  Further information would be provided to Members outside this meeting.

Mr. Aubrey commented that Universal Credit had possibly had an impact on Council debt.  The position may worsen, as Universal Credit was yet to be rolled out fully.  One of its aims was to prepare people for work and for managing their money, paying their rent etc, which was why the rent money was being paid to the person rather than to the landlord directly.

The Council had in the past considered selling its debt but this would not be possible for housing benefit debt, which was subject to statutory requirements.

RESOLVED

The Committee’s comments on the proposed Corporate Debt and Income Maximisation Policy be assessed and built into the Policy where appropriate.