Written - Launch of the ‘Council Tax – Collection in the Recession’ Report

The Recession means that many citizens of Wales are facing greater financial and social pressures.  The Welsh Assembly Government is being proactive in taking action and providing support in response to these changed circumstances wherever it is possible to do so. 

The Welsh Assembly Government is proud of the work that local authorities have under-taken in order to ensure that Council Tax Benefit (CTB) and Housing Benefit (HB) are claimed by all those eligible.  It is certain that many more people are now eligible for and claiming benefits than was the case 12 months ago, further supporting the need for the Welsh Assembly Government’s £1m funding per annum for the three years 2008-11.  

However, the Welsh Assembly Government also accepts that helping those eligible to those benefits to which they are entitled to, must coincide with the processes involved with the collection of council debt, in particular with providing sound debt advice.  People have found themselves in the difficult situation of paying their bills, including rent and council tax, whilst having their income’s reduced.  

Billing authorities have a duty to collect local taxation revenues in order to maintain a high standard of public service provision.  With more households facing increased financial pressures there is an increased risk of reduction in authorities’ collection rates.  Thus, local authorities face the difficulties and conflicts of interest that arise from trying to maintain their collection of local taxation revenue from a financially poorer society.

The standard systematic process of collecting council tax, can often ignore human factors and the impact of changes in circumstances, such as losing a job, which brings with it both financial and emotional implications.  These in turn can result in everyday matters such as council tax bills being overlooked.  If just a few instalments are missed, debt can quickly escalate resulting in charges being added and a demand being issued for the whole year’s council tax liability.  In the current economic downturn, it is vital that non-payers are contacted as early as possible and encouraged to talk to the LA about any changes in circumstances, before the situation gets out of control. 

In acknowledging these difficulties faced by the taxpayer and the tax collectors alike and the importance of tackling any debt as soon as is possible, the Welsh Assembly Government set up a working group to focus on the issues around the collection of council tax especially during an economic downturn.  Membership of the group was made up of Revenues Officers from a sample of LA’s in Wales, representatives from the Institute of Revenues, Rating and Valuation (IRRV), and the Welsh Local Government Association (WLGA) and officials from the Welsh Assembly Government.  A representative from the Citizen’s advice Bureau also attended some of the discussions and was consulted throughout.

The remit of the working group was to identify:

·  the issues around the collection of council tax and how these are being affected by the economic downturn;

·  the impact of the economic downturn on individuals who are falling behind with their payments for council tax;

·  and, how local authorities might ease the pressure on individuals suffering hardship.

The extensive discussions of the working group have given a valuable insight into the difficulties local authorities face when collecting council tax monies, but have also proved fruitful in providing a wide variety of potential solutions and methods of best practice that local authorities could consider and implement which have the best interest of the individual tax payer in mind.

The working group has produced a report – ‘Council Tax – Collection in the Recession’, which was publicly launched on Thursday  18th June 2009 at the Institute of Revenues, Rating and Valuation (IRRV) Welsh Conference 2009. 

Some of the key recommendations of this report include:

·  to focus on making payment processes as simple and easily accessible as possible, for those who can pay, by offering a wide range of payment processes, such as telephone payments, or accepting direct debit payments over 12 months rather than the standard 10;

·  actively aim to increase communication links between local authorities and volunteer organisations that provide free debt advice to individuals, so that advice regarding council tax debt is consistent and a priority approach is given to it;

·  and, to ensure that bailiffs, whether in-house or external, comply to a code of conduct, that may prevent any unethical or unprofessional practices taking place.

I envisage that this report (much like the Barriers to Benefit Report launched in June 2008) will prove a valuable reference document that local authorities and other stakeholders can refer to for guidance, ideas of best practice and solutions when faced with the difficulties of collecting council tax revenues during a recession, which will take full consideration of the circumstances and financial difficulties of the council tax payer.

The group also identified some issues which are not within the gift of local authorities to address.  These include information sharing between government departments and provision of long-term performance indicator tables showing council tax collection rates that give a more accurate picture of the collected revenue of local authorities, than the current collection tables provide.

The proactive and innovative work that the  Assembly Government is driving with its partners through the Economic Summit adapt to the changed economic circumstances and mitigate the impact of the Recession is widely acknowledged. Our work on collection is another example of this. It is essential that we adapt to it.  In modernising our approach and outlook, we are able to ensure that the collection of council tax is maintained, whilst at as little distress as possible to the taxpayers.

This report and the advice it gives to local authorities goes hand-in-hand with the Council Tax Benefit and Housing Benefit Take-up scheme, in promoting financial inclusion and tackling poverty throughout Wales, which are fundamental to the future prosperity of Wales and to the health and wellbeing of its people.