To consider the attached report.
Contact Officer: Lorraine Marshall (01296) 585296
The Committee received a report that provided an insight into the current performance of the Council Tax department including on incoming revenue and customer interactions.
In 2018, AVDC had been tasked with the collection of £143,466,236 in Council Tax, the significant majority of which had then been passes on to the Buckinghamshire County Council, the Police and Fire services and Parish/Town Councils.
Any council tax that was not collected “in year” would normally be collected within the first few months of the following financial year, with under 1% of council tax due having to be written off or collected in the following years. In recent years, national council tax collection rates had fallen although AVDC was an exception to this trend. This year AVDC’s collection rate had been 98.76%, a healthy increase on the 2017/18 final collection figure of 98.45%.
Despite the challenging financial environment, AVDC had also collected over £2 million in previous year debt in 2018/19. This was a substantial increase on the last two years collection for old debt, in 2016/17 the figure collected had been £525,016 and in 2017/18 the amount collected had been £300,012. The main factors having an impact on collection performance locally and nationally were legislative changes and the impact of austerity and changes to DWP benefit.
· A change in Government regulations from 1 April 2013 had allowed people liable to pay council tax the right to pay by 12 instalments instead of the previous 10. Due to this, any slight delay or default in payment gave the Council little or no time to take recovery action before the end of the financial year meaning that the “in year” recovery rate was reduced.
· Austerity meant that some residents had found it difficult to manage their finances even where their annual income was too high for them to qualify for support. If people experienced short term cash-flow problems then paying Council Tax instalment was often low on their list of priorities.
· The introduction of Universal Credit to Aylesbury Vale in September 2018, had affected residents and often resulted in funds being unavailable to make their monthly council tax payments. The Council had worked hard as a team to ensure that customers were made aware of the changes and had also provided staff and residents with avenues of support and guidance on how the changes might affect their ability to pay.
AVDC ran its own Council Tax Reduction Scheme granting £8,212,099 in 2018/19 to people who were struggling to pay their council tax and are on a low income. In addition, there was also a £200,000 discretionary fund. Both schemes had traditionally been used to support people who cannot pay, rather than those people who just choose to priorities other expenditure over paying their council tax. During 2018/19, the Council had used some of the discretionary fund to assist with a small group of residents who had found themselves in large debt and were facing the situation of not being able to maintain their rental liabilities.
The Committee was informed that new temporary banding procedure for new build properties had been introduced in May 2018, ensuring residents were provided with a council tax demand notice promptly to avoid them having to catch up on payments. When a property was set up on Northgate, the Council would wait for the official band to be provided by the valuation office agency before sending the resident a bill. This could sometimes take up to six months, leading to a build-up of arrears before the customer has even been provided with instalments. By the introduction of a temporary banding policy, customers received manageable instalments that were easier to maintain and assisted with achieving collection rates.
Single Persons Discounts (SPDs) represent the largest area of discount awarded in respect of council tax, with over 23,000 households claiming the 25% discount. In October 2018 AVDC had instructed an independent company to carry out a review of all residents in receipt of the discount. The review had completed on 25 May 2019 and had resulted in the removal of 1,100 discounts and an additional £412,330 in collectable revenue across the district.
Following the introduction of Universal Credit and the changes to the way DWP paid benefits, AVDC had looked at different ways to assist residents with making payments of council tax. Direct Debit was the cheapest option for the authority to receive monthly instalments, and a report had been written to implement 4 additional dates for this method of payment. Following approval, AVDC could now offer people wishing to set up a Direct Debit a selection of 6 available dates throughout the month for instalments to be paid.
Council staff had been provided with additional training to ensure they were maximising collection, whilst ensuring accuracy was maintained and correct notifications were issued first time around. The removal of summons in 2017/18 due to inaccuracy had been on average 20-22% for each court hearing. The delivery of training and improvements to accuracy in 2018/19 had resulted in the removal of notices reducing to 2-3% in respect of recent court hearings.
Members sought additional information and were informed:-
(i) that benchmarking information comparing AVDC’s Council Tax collection performance to other Council’s would be sent to Members.
(ii) that people wishing to pay their Council Tax in instalments could elect to do this in 10 or 12 instalments.
(iii) that it had been cheaper and more effective to have the SPD review undertaken by an independent company rather than doing this in-house.
(iv) that unlike some other Government agencies, Councils were not a preferential creditor when trying to collect unpaid Council tax debts.
(v) by the Cabinet Member for Finance and Resources that the all avenues for collecting debts were exhausted by the Council before debts were written off.
(vi) that AVDC Officers were involved on the Unitary Working Groups that were looking at the Council Tax Reduction Scheme and discretionary fund that might be adopted by the new Buckinghamshire Council.