Local authorities have been battling with austerity and funding crises since 2010. A new Government may bring about a different kind of relationship between central government and local councils, but Chancellor Rachel Reeves has been very clear there is no magic money tree. Mike Jackson, Vice-Chair of the High Court Enforcement Officers Association (HCEOA), says that one option councils should be looking at to tackle their challenge is to review their approach to recovering sundry debts.
Whenever we hear or read about local authorities collecting debts the focus is inevitably on council tax. But that’s just one part of the story.
Councils sadly can find themselves in a position where they are owed a growing amount of money for a whole range of other reasons. Whether that is overrun charges in areas such as road works, when fines incurred have not been paid, fines to landlords for health and safety beaches or illegal evictions, unpaid commercial rents, charges for collecting trade waste or fines following breaches in planning regulations – the list goes on – these unpaid ‘sundry debts’ are an increasing challenge for local authorities that can significantly impact on the budget bottom line.
While commercial rent can be collected under CRAR without the need for a Court involvement, the position is different for many other sundry debts.
There are two major hurdles that councils face in tackling this. These are
- ensuring they obtain a judgment in the first instance and
- taking the right option to enforce that judgment.
Obtaining a judgment to tackle sundry debt
Historically some local authorities have taken the view that some debts are not worth pursuing, perhaps because it’s thought that it’s too difficult to recover, or it won’t get paid or people are uncertain as to what their options are, but the money is recoverable, and tackling the issue shows that as an organisation you are ensuring that everyone pays their fair share.
The first step is obtaining a judgment to ensure you can recover the debt, which your legal team can assist with, or else there are many other options for assistance.
The court process can be complex to those unfamiliar with it, but seeking out expertise within your authority or investing the time to engage could prove valuable in the long run.
Transferring up / choosing the right option to enforce your judgment
Once you have a judgment in place, then one of the keys to recovering sundry debt, is choosing the right enforcement method.
There are different options out there for local authorities, and one of those is to ‘transfer up’ the debt from the County Court to the High Court so you can get a Writ of Control and the money can be pursued by a High Court Enforcement Officer.
And the good news is that you can instruct a High Court Enforcement Officer – its easy to do – just head to www.hceoa.org.uk and follow the instructions – to do all the complicated ‘transferring up’ work for you.
Today - as long as your debt is over £600 it can be transferred into a High Court writ in this way.
There is a court fee of £78 to pay at this stage, but when the High Court Enforcement Officer successfully recovers the debt and fees from the person who owes the debt, this fee is recovered in full and paid back to the creditor.
Local authority debt recovery is often dealt with by finance and debt recovery teams, so many are unaware that this route event exists, so if that’s you, it might be worth engaging with your legal team first.
Sundry debt is probably never going to grab the headlines, but when it comes to protecting and recovering council revenue, it’s an area where a different approach could help out local authorities balance the budgets in what remains a challenging context.
