There is a strong moral and financial case to drop the medieval practice of enforcing debts with hired heavies.
Illustration: Jazz Thompson
There are a thousand knock-knocks at the door every month in Bristol that are no joke. On average, 50 times a day the council instructs bailiffs to enforce council tax debts. The bailiffs charge extortionate fees and push people into the hands of payday lenders and dark places.
Although the underlying issues are not necessarily the council’s fault, the way it collects debt is making things a lot worse. But, there is a strong moral and financial case for change should the mayor decide to take it up.
I understand that staff from Hammersmith and Fulham council recently met with Craig Cheney, the Labour councillor and cabinet member for finance in Bristol. Prompted by the efforts of Labour councillor Paul Goggin, their aim was to persuade Mayor Rees’s administration to take a lead from the London council.
Following a successful pilot, as of April this year, Hammersmith and Fulham has completely stopped using bailiffs to collect council tax. In a joint venture with self-styled ethical debt collectors Intrum it instead now emphasises early intervention and tailored affordable payment plans. By doing so, the council aims to improve collection rates, eliminate abuse by bailiffs and reduce knock-on taxpayer costs, such as for emergency accommodation. It is already seeing better collection rates, even on debt that was previously sent back by bailiffs as uncollectible, and written off.
Hammersmith and Fulham has offered to help Bristol to run our own pilot study on a small sample of 10% of all council tax debts, using pre-filled spreadsheets and all. This is an opportunity within the mayor’s power to examine an alternative to the bailiffs system that brings misery and worse to tens of thousands of people every year.
And this isn’t just about bleeding hearts. The current system is less than effective at collecting even the money needed to run our services. Citizens Advice has shown that ineffective collection practices are costly to the council. And in the past two years just 30% of the £18 million of Bristol’s council tax debts passed to bailiffs was eventually collected.
Meanwhile, the hundreds in fees charged to each indebted Bristolian mounts up to millions for bailiff companies such as Bristow and Sutor and their investors, among them two major Conservative Party donors.
This isn’t just my opinion. As meticulously shown by a coalition of seven national charities including Citizens Advice and Stepchange, the bailiffs system is rotten to the core, despite efforts at reform in 2014. The charities are calling for changes to address a range of problems with the current system. For example, bailiffs are not independently regulated, there is no clear complaints system and the fees that they charge incentivises more aggressive tactics.
As a stark example of how ridiculous the system is, if a person with vulnerabilities is encountered, the bailiff is relied upon to report this to the council, who then may consider a change in approach. But there is no incentive or mechanism to force bailiffs to make these reports, and there is no clear complaints system or independent regulator to hold them accountable.
The result, playing out on doorsteps all over the city, is predictable but shocking nonetheless; The Cable has discovered that although the council instructs bailiffs on average a thousand times each month to enforce council tax, in the past 14 years there have been just 1,409 cases of vulnerability identified.
Though individuals on certain benefits are excluded from being classed as vulnerable, these figures stand in contrast to the Stepchange debt charity finding that 90% of their clients have some level of vulnerability, beyond their obvious financial difficulty.
However, the reforms the charities are calling for need government action, which does not seem likely. But we in Bristol can act now. Unlike with issues relating to government cuts and austerity, in this case the mayor and council have nothing to hide behind and have the power to introduce changes.
Plans have already been touted for two years now, to take Bristol’s debt enforcement in-house. While this could increase accountability, bank millions in fees for the council, and contribute to a more joined-up approach, the idea still falls short, as it essentially replicates the current model and is seen primarily as a money saving mechanism. The Money Advice Trust has raised concerns that “in-house enforcement could lead to incentives for local authorities to be less open to putting early intervention strategies in place”, as addressing debts early on would mean less money raised in enforcement fees.
This is why braver leadership is called for, to explore more far-reaching reform.
I’m skeptical of any private debt collection companies. But the current set up only benefits the bailiff companies getting fat off the misery of others. It’s time this medieval practise was dropped. A dozen Labour councillors have already publicly expressed support for change.
We all know that the mayor and everyone at the council have got their hands full and a tough job. But running a pilot or an equivalent study is an open goal that could help the financial needs of an austerity-battered council in a way that doesn’t further punish poor and working class Bristolians.
If Mayor Rees were to boot out the bailiffs, that for one would be a powerful legacy.