How can local authorities maximise collections?

In the backdrop of belt-tightening, how can local authorities maximise collections and streamline processes?

With a 40% reduction in central funding many local authorities are paring back services to the statutory minimum, despite the risks of legal challenges or the impact of cuts on vulnerable residents. 

Revenues and benefits are becoming increasingly high profile against this backdrop of belt-tightening with challenges to maximise collection and make the best use of resources, as housing benefit caseloads migrate to Universal Credit.

The last four years have seen many authorities implement above inflation increases in Council Tax, often just short of the 2.99% that would require a local referendum. In 2012/13 total Council Tax debt stood at £2.4 billion increasing to £3 billion by 2017/18. However, it’s not just the amount of debt putting a strain on stretched council resources, it’s the increased indebtedness of those least able to pay.

Since the localisation of Council Tax Support in 2013, 3.6 million working age households who would have been entitled to support under the old Council Tax Benefit arrangements are entitled to 24% less on average. This equates to over £700 million in Council Tax debt and councils now have to collect from around 1.4 million households who would have previously been entitled to full Council Tax Benefit. Most localised schemes are becoming less generous not least in mirroring the cuts in national benefits.

Councils are therefore juggling budgetary pressures with increasing debt, much of it of low value and owed by taxpayers in already straightened circumstances. The timetable for Universal Credit rollout just adds further uncertainty to future plans.

Service providers like Capita have well established solutions for providing processing resilience from shared service centres but we are finding an increased demand for longer-term relationships for a range of solutions, as local authorities realign their Revenues and Benefits Services. Making the most of Department for Work and Pensions (DWP) funding for verify earning and pensions (VEP) activity is an example of this as it ensures access to additional income without disrupting local service delivery. This is a fully managed end-to-end solution that deals with VEP alerts, reassessments and associated queries provided by experienced assessment staff from our network of processing centres.

This is predicated on the greater capacity and flexibility Capita has in delivering services to multiple local authorities but also the investment in developing an optimised approach that makes the most of the funding available and simplifies the process for the customer. We also have the advantage of dedicated policy resources who ensure consistency in the treatment of earnings which can often cause delays and confusion for assessors and claimants in determining Housing benefit/council tax support entitlement (CTS).

This paves the way for a more streamlined approach to Council Tax recovery and the assessment of CTS changes as Universal Credit has been designed to respond dynamically to fluctuations in income for low earners. This requires Councils to change the configuration of their services to stem the flow of constant reassessments and consequent changes to liabilities which reset the recovery timetable and tie Council Tax staff up in chasing increasing and shifting low level debt.

Our focus has therefore been on responding to a broader requirement for solutions where the remote and self-contained delivery of particular processing challenges, like VEP alerts, is just part of the picture. Taking a step back from the traditional service delivery models, this has led to a constructive dialogue with local authorities for redesigning CTS schemes and the processes for dealing with changes of circumstance so local staff can focus on the areas that matter.