Agenda item

A report outlining the debt management update is to be presented to the Committee.

The Interim Revenue and Benefits Manager, Kevin Legg, introduced the debt management update report and outlined the Council’s performance in relation to Council Tax; Business Rates; Council Tax and Business Rate Arrears; Former Tenant Arrears; Sundry Debts and Write offs. Members were informed that a write off report will be submitted to the Cabinet on 8 February 2023.

The Tenancy Service Manager, Doug Stother, outlined the position with regard to Council house rent and current tenant arrears figures for rented properties and garage units.

Following a query regarding the number of tenants in rent arrears, the Committee were surprised to learn that between 800 and 900 tenants are in rent arrears. However, it was explained that some of the tenants pay their rent using housing benefit which pays four weeks in arrears and that would account for a significant proportion of residents.

It was noted that some tenants in rent arrears are at the stage that court is required and whilst Officers have confirmed that this is the case, Members were informed that the approach is to engage with tenants at an early stage of rent arrears, around two to three weeks. There is also a recognition that external factors have affected tenants’ ability to pay.

A question was raised on whether the wording of letters to inform tenants that they are in rent arrears had been reviewed as the wording can be perceived as overly threatening and that a better worded letter may lead to more engagement and willingness to resolve ongoing arrears. In response Members were informed that Officers are reviewing the letters, as well as using other methods of communication with a view of creating greater engagement with tenants.

Concern was raised with the amount of legal work that could be required to process the number of cases, however reassurance was given that most cases are handled within the team and legal only get involved if the case is complex, which few are.

Officers were asked how many of the debts were over two years old, however Members were informed that the data would need to be checked before a definitive answer was given.

A Member asked that where garage rents were not being paid was it possible to seize garages and sell the contents assets, however Officers were not sure whether this would be possible but undertook to investigate whether this is an option.

Members commented that the historic sundry debt needs resolving and removing from the balance sheet. In response, it was confirmed that Officers have to follow a process before debt can be written off. In addition, with some debts it could be the case that the debtors, once reminded, could be able to pay the debt that they owe.

A Member raised a concern regarding, what appears to be, debt owed by staff, however it was noted that the debt was allocated to the incorrect cost codes and needs to be reclassified.

The Committee considered the Council Tax and Business Rates arrears, however Members weren’t too concerned considering the Council’s collection rate in comparison to both neighbouring authorities and nationally is favourable.

A discussion ensued regarding unpaid invoices for one-off hire of rooms at Phoenix House. A Member queried why the Council was not requesting payment prior to the hiring of the rooms.

The Director for Corporate Services stated that Officers require more delegation therefore a more flexible approach can be adopted when deciding whether to write off debt. This proposal would be coming forward to a future Council meeting for approval. The Committee thought is a sensible proposal and would enable Officers to be more agile when considering whether to write off debt.

RESOLVED

The Scrutiny Committee

1)    Noted the Council’s performance as set out within the report regarding the collection of debts.

2)    Noted the proposed future action including the use of Charging Orders, Winding up Orders and Bankruptcy Orders for Council Tax/Business Rate arrears in line with the Corporate Debt Policy.

3)    Requested that a further report is presented to the Committee in April outlining the progress on sundry debts, housing rent arrears and garage rent arrears.