I was intrigued to read that a northern council is mulling over the idea of setting up an in-house debt collection agency to chase outstanding council tax.
The council involved is Redcar and Cleveland and the plans, while at an early stage, will be discussed by councillors before the financial year ends.
The story was broken by the Northern Echo, after the newspaper received a letter from a whistleblower who was concerned that the council saw its proposed agency as generating revenue through charges levied on hard-pressed debtors.
At the moment the council employs private bailiffs, whose bills start to tot up bills when they send a first letter, apparently costing £80.
But before that stage is reached, ‘last chance’ letters are sent to those who haven’t been paying their bills, and if they pay up there are no charges.
The council has said that it has no problems with its current system, but as part of wider welfare reforms.
Councillor Norman Pickthall, cabinet member for corporate resources, told the Northern Echo: ‘Bringing the debt collection service in-house would allow better control of the welfare aspect of council tax collection enabling the council to provide appropriate support to vulnerable debtors.’
I shall be interested to see if the council has greater success in collecting outstanding bills than the professionals. But I wonder if a few years down the line the story will be like Britain’s enthusiasm for DIY and house makeovers, something we tried once but now prefer to leave in the hands of skilled craftspeople, builders and interior designers.
The problem is that seeing every case through a welfare lens risks ignoring human nature as expressed in the phrase ‘won’t pay (but could) and can’t pay (but would like to)’.
Anthony Sharp, proprietor of Anthony Sharp associates, writing recently in CCR Magazine, noted a survey by Equifax showing that 16% of Britons have taken out credit with no intention of paying it back. He supports the Financial Conduct Authority’s principle of ‘treating customers fairly’ but points out that it doesn’t go on to say that everyone is honest and should be treated as such when the evidence points to the contrary.
Collectors, he argues, must be allowed to challenge those who refuse to pay; otherwise they will be laughing all the way to the bank.
Without between collectors doing their job and fair treatment of debtors, he fears that ‘the art of collection, of which challenging questioning is a part, will be lost and collections will sink into a morass of mediocrity and poor returns’.
Perhaps the councillors will bear that risk in mind when they consider setting up as debt collectors.
Meanwhile, SJ Collections welcomes inquiries from organisations, public or private, troubled by unpaid accounts.
