Resources and Audit Committee. Corporate Collections and Recovery. Head of Housing & Community Safety

Transcription

1 CLACKMANNANSHIRE COUNCIL THIS PAPER RELATES TO ITEM 10 ON THE AGENDA Report to: Resources and Audit Committee Date of Meeting: 26th February 2014 Subject: Corporate Collections and Recovery Report by: Head of Housing & Community Safety 1.0 Purpose 1.1. This report updates members on the position with corporate collection rates across all income streams. 2.0 Recommendations 2.1. Members are asked to note the report and challenge as appropriate. 3.0 Background 3.1. The Service is responsible for the collection of some 70M of income each year. This is broken down as 29.8M Council Tax; 16.1M rent; 15.6M Non-domestic rates (NDR) and 7.8M sundry debts Collection rates to the end of the third quarter are shown in appendix The shortfall in collection from all sources now amounts to some 10.5M as follows: - 7M council tax debt. 1M housing benefit overpayments 1.5M sundry debts 1.1M current and former tenant rent arrears 3.4. These debts have been increasing for several years despite the detailed work undertaken by the service around four years ago. There have been four changes in management over this period and the three managers who had been involved previously are no longer with the Council. Inevitably under the new management a number of areas for improvement have been identified and are now being addressed. There are some signs of improvement in recent months in some areas, with increased focus on collection and benefit processing. The remainder of the report discusses debts, and then sets out the recovery plan. 165

2 4.0 Collection Rates and Recovery (quarter 2) Council Tax Billing 4.1. Exhibit 1 (below) presents a breakdown of the 6.8M council tax due to the Council that remains uncollected. There are over 20,0000 accounts on the system (some individuals will have more than one account). Exhibit 1. Council Tax Arrears ( 6,866,399) Council Tax Warrants Recovery Summary Year Number Acc's still To Be Passed To Warrant Total Amount Due 2013/ , / , / , / , / , / , Total , Actual Warrants Actioned this Financial Year Months Year Volume Jun ,665, Jul / , Aug / , Sep / , Oct /15 TBC Nov / /14 TBC Dec /15 TBC Jan /07 to 2010/11 TBC Feb /15 TBC Mar /07 to 2014/15 TBC ,597, Number of bills to be issued after system roll back Year Volume 2005/ , / , / , / , / , / , / , / , / , / , / , / , Total ,692,

3 4.2. As members will be aware the first phase of recovery of this debt has started. Around 7500 bills have been sent out, which has resulted in over 5000 of debt being recovered as well as a number of repayment arrangements It is however recognised that the standard of billing on this occasion fell below the standards of customer service that we aim to provide. This is being addressed before the next batch of bills is sent out. Housing Benefit Overpayments 4.4. There is an outstanding total of 983,080 in housing benefit overpayments. Again many of these debts go back several years. There are over 2000 current and former tenants with overpayments. This is shown in Exhibits 2 & 3, below. Exhibit 2: Housing benefit overpayments to current tenants Range Caseload Value , , , > 1, ,085,63 Totals , Exhibit 3: Housing benefit overpayment to former tenants Range Caseload Value , , , > , Totals , The new Sheriff Officers are to be tasked with recovery of all former tenant benefit overpayments. Sundry Debts 4.6. Around one third of the 1,656,120 Sundry Debts outstanding have been due for more than one year. Exhibit 4 provides a breakdown of this amount. 167

4 Exhibit 4: Sundry debts at October 2014 Sum of Value Service Months Months Months Months 36+ Months Grand Total Capital Com. & Regulatory Service 126,920 40,955 5,049 43,124 19, ,627 Education Services 93,696 3,295 55,904 10,326 10, ,427 Facilities Management 85,818 7,876 3,338 6,688 12, ,006 Housing 36,207 39,692 33, , , ,029 Housing HRA 24,925 5,817 3,132 13,070 4,572 51,518 Property Contracts STO 5,914 5,914 Requisition from Joint Boards 15,555 4,014 19,569 Revenue Funding 15,182 17,449 14,667 17,824 3,637 68,760 Social Services 271,764 42, ,520 76,034 58, ,478 Strategy & Customer Services 3,666 3,666 Support Services 1, ,129 9,062 27,800 Unallocated receipts - 28,853-1,363-4, ,651 Suspense 21,104 3,447 1, ,639 36,772 Grand Total 673, , , , ,993 1,656,120 Current Rent Arrears 4.7. Rent arrears have increased steadily in recent years, rising from 346K at the end of March 2012, to 526K by March 2014, to its current level. The breakdown of current tenant arrears is shown in exhibit 5. Exhibit 5: Current Tenant Arrears (quarter 2). Current Tenant Arrears No. of Tenants Value Under , , ,796 > ,383 Total ,473 Former Tenant Arrears 4.8. Former tenant arrears have also been steadily increasing. As the annual review of debtors report dated 26 June 2-14 revealed, the debt at was 331K. This rose to 367K in , and to 427K in The figure at the end of quarter 2 is shown below. Exhibit 6: Former Tenant Arrears. Former Tenant Arrears Number Total , All former tenant arrears are to be passed to the new Sheriff Officers and collection rates will be monitored. 168

5 5.0 Recovery Plan 5.1. Universal Credit will roll out to new claims from single people, who would otherwise have been eligible for Jobseeker s Allowance, including those with existing Housing Benefit and Working Tax Credit claims, between May and July This will inevitably put further pressure on collection rates Whilst the levels of debt are higher than would have been hoped for this does provide an opportunity for the service to collect a substantial amount of income. A number of actions have been instructed as set out below The work scheduled for the Revenues service with Vanguard Scotland consultants has been brought forward to mid-february and its scope extended As part of this work it is intended to discuss with trade unions and staff widening the job profile for housing officers to deal with rents, along with other functions including collections. An expanded team of housing officers taking responsibility for small numbers of properties will create much closer relationships with our tenants and customers. This will be particularly important to mitigate the impact of universal credit and direct payments. This approach is endorsed by Vanguard, based on its work with clients across the UK. As part of this service restructure the work of the "back office" collections team will also be reorganised to provide a clearer focus on customer service and streamlined processes Basic budgeting and debt advice will also be built into the job profile of housing officers. The role the specialist money advice advisers will also be reviewed to support these staff and focus on income maximising whilst reducing debts to the Council The new Sheriff Officer contract for pursuing outstanding debts is now in place. If this does not result in an improvement in collection rates then it may be necessary to consider alternatives An improved tenancy sign up procedure is now in place which ensures that housing benefit forms are completed and the first week rent taken where appropriate. It is a vital part of the landlord tenant relationship that the responsibility and pattern for paying rent is established at the outset of a tenancy, and tenants are not allowed to build up arrears as soon as they move in SWF payments are now offered to those who have an offer of a tenancy, rather than waiting for them to be have a signed agreement Following a tender, it is intended that subject to budget approval a new new payment card system will be rolled out in June. This will allow a far wider range of payment options for rents, council tax, etc. Bills can be paid over the internet, at local shops, etc. 169

6 5.10. There is now the facility to pay by cash or card at Kilncraigs The repairs team now have a terminal to allow payments for rechargeable repairs to be made in advance over the telephone Closer working arrangements for debt recovery have been put in place with colleagues in Legal Services rather than automatically passing all debts to Sheriff Officers Colleagues in the contact centre are making calls to debtors, taking payments and making arrangements New reconciliation processes are also being introduced for all areas of the service which involve closer joint working between Finance and Revenues colleagues Earlier in the year that staff team redesigned housing benefit processing. The new processes were audited by the Department of Work and Pensions (DWP) and found to be satisfactory. Improved processing time reduce the opportunity for overpayments to arise. The reported processing performance can still be adversely affected by DWP backdating of claims, as well as any increased focus on recovery. Performance has remained fairly consistent during the year, and is around the national average. 6.0 Conclusions 6.1. The Revenues service is in the process of transition. The benefits of this will not be seen until the end of the second quarter of , at the earliest. However, the report should give members confidence that issues have been identified and are being tackled. 7.0 Sustainability Implications 7.1 None 8.0 Resource Implications 8.1 Financial Details 8.2 The full financial implications of the recommendations are set out in the report. This includes a reference to full life cycle costs where appropriate. N/A 8.3 Finance have been consulted and have agreed the financial implications as set out in the report. N/A 8.4 Staffing 8.5 There are no staffing implications associated with this report 170

7 9.0 Exempt Reports 9.1 Is this report exempt? Yes (please detail the reasons for exemption below) No 10.0 Declarations The recommendations contained within this report support or implement our Corporate Priorities and Council Policies. (1) Our Priorities (Please double click on the check box ) The area has a positive image and attracts people and businesses Our communities are more cohesive and inclusive People are better skilled, trained and ready for learning and employment Our communities are safer Vulnerable people and families are supported Substance misuse and its effects are reduced Health is improving and health inequalities are reducing The environment is protected and enhanced for all The Council is effective, efficient and recognised for excellence (2) Council Policies None 11.0 Equalities Impact 11.1 Have you undertaken the required equalities impact assessment to ensure that no groups are adversely affected by the recommendations? Yes No N/A 12.0 Legality 12.1 It has been confirmed that in adopting the recommendations contained in this report, the Council is acting within its legal powers. Yes N/A 13.0 Appendices 13.1 Please list any appendices attached to this report. If there are no appendices, please state "none". Appendix 1 Revenue PIs 14.0 Background Papers 171

8 14.1 Have you used other documents to compile your report? (All documents must be kept available by the author for public inspection for four years from the date of meeting at which the report is considered) Yes (please list the documents below) No Author(s) NAME DESIGNATION TEL NO / EXTENSION Ahsan Khan Revenues Team Leader Head of Housing & Community Safety Ext 2473 Approved by NAME DESIGNATION SIGNATURE Ahsan Khan Head of Housing & Community Safety Signed: Ahsan Khan Nikki Bridle Depute Chief Executive Signed: Nikki Bridle 172

9 Resources and Governance Corporate Performance Indicators APPENDIX 1 Code Description 2012/ / / /15 Value Value Target Q2 Q3 Latest Note RAP CTA 011 Sundry debt in year collection 83.62% 73.15% 90.00% 76.16% 75.84% Significant improvement in collection due to large debtor outstanding since April now settled. Lead RAP CTA 007 NDR in year collection rate 98.00% 97.66% 98.00% 57.75% 83.42% Significant progress continues in the collection of NDR and is in line with previous years RAP CTA 014 Current rent as % of net debt 5.45% 6.58% 6.00% 7.20% 7.21% This has stabilised between quarter 2 and 3 and with an additional resource in quarter 4 we would hope to make maintain this. Targeted contact continues to be made with tenants although there will be an impact as staff have to deal with more council tax recovery. RAP CTA 019 Debt collection rates > 90 days 39.30% 37.01% 35.00% 58.29% 55.62% There has been a drop in collection due to the value of invoices raised relating to the previous quarter. This is a continuing issue with the Services raising invoices late. Meetings are being set up with services to address this. RAP CTA 01a Council tax collected within year (excluding reliefs & rebates) RAP CTA 020 Number days taken on average to process new benefits claims 95.32% 94.73% 51.15% 79.02% Collection levels were in line with previous year until Dec when there was a large increase of 10%. This can only be attributed to more vigorous recovery action being taken. This will be monitored The team have continued to maintain processing days at a very busy time, however I would expect this to increase in quarter 4 due to the high demand placed on the team taking calls for recovery of council tax. 173

10 Code Description 2012/ / / /15 Value Value Target Q2 Q3 Latest Note Lead RAP CTA 021 Number of days taken on average to process changes to benefits claims RAP CTA 022 Percentage of applications to Local Social Fund processed within 2 days (Crisis grants) RAP CTA 023 Percentage of applications to Local Social Fund processed within 28 days (Community Care grants) The team continue to make significant progress in the reduction of processing days but this will be affected as above. N/A % % 100% 100% Applications are being processed within the stated time. Number of applications continues to be less than anticipated. N/A % % 100% 100% Performance remains consistent, with all applications being processed within the prescribed timescales. 174