Cash-strapped councils could save over £1 billion a year by modernising debt recovery systems

Councils could save themselves over £1 billion a year by switching to a new computerised debt recovery system, according to new research. A pilot scheme led by Northampton Borough Council analysed £2 million of collectable debt that could be quickly reviewed and actively progressed. If the same results were achieved across the country, cash-strapped local authorities could make progress on inactive debt and offset a large part of the cuts in Government grants. Northampton has worked with niche computer software company Xantura to devise the pioneering Matchmaker solution, which pulls together information held by separate departments in areas such as council tax and rent arrears and helps establish a debt profile for every resident. Xantura is also in discussion with other councils interested in following Northampton’s pioneering footsteps. Matchmaker has been developed in the wake of recent figures highlighting the urgent need for a new approach to the way local councils identify and recover individual debt. Figures released earlier this year showed that over £1 billion was lost in uncollected taxes across 326 local authorities in England in 2009. And with local authorities facing average funding cuts of 25 per cent by 2015, there is an urgent need for effective systems which safeguard their revenues as well as reducing costs. Robin Bates, head of Revenues and Benefits at Northampton Borough Council, said: “As a result of the pilot and an internal programming plan, the Council has cut the percentage of inactive debt from over 20 per cent in 2009/10 to less than 9 per cent in 2010/11. Having data available that showed a single profile for each individual owing money to the Council has been invaluable in helping the Council achieve this improved performance.” The data matching system will ensure councils are maximising their income stream while avoiding placing an extra burden on the people they serve. The early intervention system means that debts will not increase further, reducing the potential for individuals to face enforcement action. Added to this, there are also those who repeatedly fail or refuse, despite councils’ best endeavours, to make benefit applications with the result that so many who should be receiving help are instead billed at maximum rates. “The pilots and analysis have been deemed highly successful and insightful by senior managers and discussions are in place with a view to extending the service. Our solution helps councils ensure that citizens that can’t pay get support and those that won’t pay receive strong and appropriate recovery action”, said Wajid Shafiq, Chief Executive of Xantura. Further evidence of the need for a Matchmaker solution comes from the Citizens Advice Bureau, which urged councils to rethink their approach to debt collection after recording a 30 per cent increase in the number of people seeking help to deal with debt. As a result of the single view of debt report council officers in Northampton can now confirm an individual’s total indebtedness across multiple council departments and create a managed debt plan to help them overcome their spiralling debts. “When Agnes, a 83 year-old pensioner, contacted the council to say she could not afford to pay her bills for the month, it was established that she had actually run up (and was attempting to separately pay off) multiple debts amounting to several thousand pounds across council departments, including rent arrears, council tax and overpaid housing benefit,” Mr Bates added. “As a result of the single view of debt report we were able to create a managed debt plan encompassing all of Agnes’s debt in a single, affordable weekly payment, thus enabling her to reduce her multiple arrears in a prioritised and mutually acceptable instalment plan. “The ability to address the single indebtedness of a citizen, alongside summarising by groups and areas, ensures that we can take a fair and equitable approach to collection.” The system also allows councils to identify existing areas of deprivation and assess the emergence of new areas coming under financial stress. Further, the system allows councils to advise people of their total debt when making arrangements and can trace unallocated credits that have been received for payment, but have no reference number. For media enquiries, please contact Romilly Dennys of Media Intelligence Partners on 0203 0088149 or 07786221309. Ends Notes to Editors: Xantura is a niche consulting and technology company focused on embedding the innovative use of citizen and patient data into health and local government services. They have developed a unique data sharing and analytics platform (informed by work undertaken for the Department for Communities and Local Government and reviewed by the Information Commissioner’s Office) that draws securely on records from different agencies – and information from service users themselves – to create powerful insight into individuals’ care needs, and links it to the actions required to meet those needs.

Tags: