Council could scrap use of Debt Collection Agencies to be ‘kinder’

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small business chasing late payments

Council Bosses in Lancashire are to discuss abandoning the use of Debt Collection Agencies to collect rent arrears or council tax. South Ribble and Chorley councillors will discuss bringing in a ‘fair collection charter’ which is aimed at adopting a more ethical, kinder approach to debt collection in Preston and Chorley.

The proposed changes and new charter will be presented to South Ribble councillors at a council meeting tomorrow.

Council Members will be advised that the failure to adopt a more sympathetic debt collection policy “would mean failing to provide support to financially vulnerable residents and local businesses in financial difficulties.”

And a report to the council says that the Citizens Advice Bureau “has welcomed the changes as being much, much better for people in poverty.”

The report goes on: “Debt can be a determinant of wider issues and adoption of these measures will help to ensure a joined-up approach to managing residents and local businesses experiencing issues.

“Where residents have no means to pay there is no benefit in pursuing enforcement action, incurring additional costs and increasing their vulnerability impacting upon mental health, well-being and self-confidence.”

The move comes at a time where local authorities are already feeling the financial pinch following the pandemic. There has been increases in unpaid rent and revenue for Councils across the UK. Regardless, liberal South Ribble councillors says a more considerate approach to rent and tax collection is still needed which likely lead to a rise in Council tax for the corresponding areas.

The report also says: “The council has a duty to collect what it is owed in order to fund vital local services.

“The council also recognises that some residents and local businesses find themselves in financial hardship and we will do all we can to work with them and support them in making payment.

“The current debt management policies have been in place since 2015 at Chorley and 2018 at South Ribble. Both councils have more recently adopted some measures and forged partnerships with other organisations in line with best practice recovery.”

“There is currently a move towards more ethical debt recovery and an increased emphasis on fairness in government debt management.”

South Ribble says the new charter is aimed at “fulfilling the council’s responsibilities and to support residents and local businesses.”

It includes helpful measures that residents and local businesses can take to help the council to help them.

The authority says it will also make “a clear public commitment to make every effort possible to reduce the use of bailiffs over time” – something Chorley Council has already done.

The report continues “The fair collection policy focusses on a more proactive approach than the previous debt management policies, providing help to residents and local businesses in managing their finances.

“It also emphasises actively reducing outstanding debt by encouraging residents and local businesses to apply for all available help such as discounts and exemptions, discretionary housing payments and council tax support.

“It is difficult to predict the impact on the councils’ collection rates as there are a number of other factors at play not least the Covid pandemic.

“The impact of the adoption of the charter will be reviewed in 18 months time.”

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