Liverpool Council debt collectors are to be in post for at least another two years after contracts were renewed in the nick of time.
A two-year extension has been agreed to the contract for enforcement agent services for the collection of debts owed to the council on the very same day the existing terms were due to run out. In January 2019, the authority agreed to enlist the services of debt collectors to round up funds owed around council tax, business rates and parking.
Contracts with four enforcement agents began on June 21, 2019, for three years, with the option to extend for a further two. That agreement was scheduled to run out on Tuesday, the same day new terms were arranged.
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The ECHO has previously reported how following an expensive energy contract debacle that could impact the city’s schools and fire service, and 13 contracts costly agreements either expiring or in danger of running out, the local authority is moving to set up a position to oversee its contract handling process. Last week, Mayor of Liverpool Joanne Anderson said the contract situation was something the council needed to “get a grip of” and it needed to “get its house in order”.
A delegated action report (DAR) outlined that the council does not incur any costs associated with the contracts and agents recover their fees from the debtor when the debt is paid. If the debt is not recovered the enforcement agent is responsible for its own costs.
Liverpool Council entered into contracts with four enforcement agents to recover these debts on behalf of the council; Jacobs, Newlyn, Bristow & Sutor and JBW, according to the DAR. It said: “Enforcement agents can be very effective in the recovery of council tax, business rates and parking services debts with at least £3.5m being recovered annually in council tax and business rates alone.
“However, enforcement agents are only employed by the council after the customer has persistently failed to pay the amount due and when all other recovery options have been exhausted.” Customers owing money to the council will receive several letters requesting payment of the debt before any enforcement action is taken.
It had been expected that the decision to extend the contract would be taken by officers under delegated powers, but following further review, it was deemed a “key decision by virtue of its importance to ensuring robust collection mechanisms are in place to ensure the financial resilience of the council.”
The report said that had the contracts not been paid, it would have posed a financial risk to the council and would have “a detrimental impact on the collection of outstanding Council Tax and Business Rates debts, as well as any sundry debts that may be referred to the enforcement agents.” It added that the “maximisation” of council tax, business rates and parking services debt collection “significantly improves the financial resilience of the council and enables council expenditure to be used on services that are likely to improve the health and wellbeing of citizens.”
