Agenda item
Revenues Performance
This report outlines performance in relation to Revenues collection (Council Tax and National Non-Domestic Rates) collection for the financial years 2008-09 and 2009-10. Performance is shown as at 31st July 2009 for the 2009-10 year. End of year performance for 2008/09 is also included.
Representatives from Capita will be present to respond to Members’ questions.
Minutes:
Margaret Read (Head of Revenue and Benefits) introduced the report which provided details of Revenues performance for 2008/09 and up to 31st July 2009 for 2009/10. She confirmed that an in year collection rate of 94.7% had been achieved for Council Tax collection in 2008/09, representing a 0.1% improvement from the previous year and also resulting in a move up the London boroughs’ performance table from 24th to 23rd. It was noted that most boroughs had either maintained last year’s collection rates, although in the case of 13 boroughs, collection rates had reduced. Margaret Read continued that arrears collection targets had not been obtained, although there was still some hope that the shortfall for 2006/07 and 2007/08 could eventually be met. For 2009/10, monthly profile targets were broadly being met with collection at 31 August achieving 49.39%, 0.01% ahead of the same time in 2008/09. The Select Committee was advised that the 2008/09 in year collection rate of 94.7% had exceeded the contractual target of 93.75%, and in view of this a non contractual target of 94.8% for 2009/10 had been set, with a contractual target of 94%. Margaret Read drew Members’ attention to a number of strategies for improvement as detailed in the report.
Turning to National Non Domestic Rates (NNDR) collection rates, Margaret Read confirmed a collection rate of 98% had been achieved I n208/09, 1.1% lower than the previous year, although across London boroughs the average decrease was even higher at 1.2%, which had resulted in the Council improving from 18th to 15th in the London boroughs performance table and in the 2nd quartiles for NNDR collection for the first time. . As of end of August 2009, collection stood at 48.05% compared to 47.55% the previous year although this could be partly attributed to changes in regulations with regard to long term empty properties of a rateable value of less than £50,000 being entitled to relief and exemptions. However, Margaret Read explained that the increase in performance in comparison to the previous year was reducing each month and it was anticipated that performance would not exceed last year’s by the end of November 2009. Members noted that a revaluation of NNDR properties was due on 1st April 2010 based on market value rates as of 1st April 2008. Margaret Read also advised that non domestic properties with a rateable value in excess of £50,000 would be levied a 2p charge as part of the contribution to the Greater London Authority’s Crossrail scheme.
Margaret Read concluded by stating that the Revenues and IT contract was due to expire in April 2011 and a full options appraisal was underway, due for completion in November 2009. A report with regard to this would be presented at a future meeting of the Select Committee.
During discussion, Councillor H B Patel expressed concern about the arrears targets not being met and enquired about what measures were being taken to address this. He asked how a situationdetailed in the report about landlords of multiple properties with significant Council Tax arrears, including £53,000 in one instance, had arisen. Councillor Mendoza enquired whether it was possible to have a tracking system of issues that were frequently raised at meetings in respect of Revenue Peformance. Councillor Bessong asked what impact the pilot scheme of calls to the One Stop Shop contact centre concerning Council Tax arrears being transferred to Capita was.
The Chair welcomed the overall improvements in performance despite the challenging economic circumstances and enquired on the likely length of the new contract once the present one expired. With regard to bailiffs, he enquired in what circumstances were bailiffs having an increasing presence and was this a more effective method of recovering arrears. Clarification was sought as to whether bailiffs were now being used earlier in the recovery process. The Chair also sought details with regard to information sharing with neighbouring boroughs.
Sue King (Capita) was invited to respond to the issues raised. She explained that there was evidence that a number of multiple property owning landlords who had applied for grants for properties under Houses in Multiple Occupation registry scheme had also erroneously claimed that tenants were liable to pay Council Tax for these properties. Such cases were being pursued, including one that was due to go court next week. Members heard that information on individual cases could be provided and that the Select Committee would be kept informed of developments. With regard to NNDR arrears, Sue King advised that debts would only be written off where it had been determined that the debt was not recoverable. She added that obtaining payments for empty business properties that had arrears arising as a result of losing their exemption, was particularly difficult. Members noted that bailiffs were not entering the recovery process earlier as there were procedures that needed to be adhered to, whilst use of bailiffs also increased costs. However, there would inevitably be a number of cases that required the professional attention of bailiffs. A number of bailiffs had recently been recruited as part of a blitz on arrears recovery, including visits to properties on Saturday mornings when occupiers were more likely to be at home. Bailiffs were also being encouraged to refer cases back to Capita where this was appropriate. The Select Committee heard that the information exchange between neighbouring boroughs using LOCATA had been successful in tracking down those who were in arrears.
Duncan McLeod (Director, Finance and Corporate Resources) advised Members that NNDR collection was undertaken on behalf of the Government and as such any shortfall was not directly absorbed by the Council. Margaret Read advised that Revenue and IT contracts were typically of a 5 year period with an option to extend. Paula Buckley (Head of Client Team, Revenue and Benefits) added that 6 organisations had preliminarily expressed an interest in the Revenue and IT contract, with most looking at longer term contracts, in some cases 10 years. Members noted that Capita felt that contracts below 5 years were not financially viable to them, and that a longer contract would be more productive. With regard to the pilot One Stop Shop scheme, Paula Buckley commented that it was intended to increase the number of recovery calls referred to Capita staff as the pilot had demonstrated that this enabled arrangements to be agreed during the call, with a higher degree of success in terms of payment arrangements being complied with.
Supporting documents: