Lambeth Council, like many local authorities in the UK, is facing financial challenges due to increased demand for services, reduced funding, increased energy costs, welfare benefit reforms, aftermath of Covid-19, rising demand for social care services, and high inflation.
The council recognised a need to address their aged debt, which has doubled in less than 10 years, partly due to the suspension of recovery activities resulting from the Covid-19 pandemic.
Solution
In response, Lambeth Council partnered with Capita to devise a strategic approach aimed at reducing arrears and, consequently, the overall debt. The collaboration focused on:
- Assessment: Rigorous review of the oldest council tax arrears cases.
- Intelligent segmentation of the debt file to focus resource on most promising records
- Process optimisation: Enhancements in the debt recovery process to increase efficiency and to drive results
- Community engagement: Identification of the most effective channels for engaging with residents. Capita’s Local Revenues Plus Service provided a tailored solution encompassing:
- Recovery specialists: A team dedicated to maximising revenue collection.
- Revenue maximisation: Data-driven strategies to increase the council’s income.
- Proven track record: A history of successful debt recovery initiatives.
Benefits
The partnership promised multiple advantages:
- Increased revenue: A boost in the council's financial inflow.
- Accurate forecasting: A decrease in both write-offs and bad debt provisions.
- Trusted partnership: The benefit of Capita's expertise and reliability.
Results
The initiative yielded significant financial gains:
- Savings: £3 million in reduced aged debt. Cash flow: An additional £500,000 in revenue by March 2024.
- Review impact: Over £8.6 million in council tax arrears were scrutinised, resulting in
a further £1.2 million in committed payment arrangements. - Operational efficiency: The project facilitated the issuance of new payment bills following necessary amendments.
- Customer satisfaction: A low complaint rate, with only one complaint across 3,861 accounts reviewed over a nine-month period.
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