Effective enforcement – the economic and ethical case for civil enforcement

Effective enforcement – the economic and ethical case for civil enforcement.

Part One.

There has been recent publicity raising concerns about the increase in the number of Liability Orders issued to enforcement agents for council tax arrears. The implication is that local authorities are cutting corners and reverting to court action and the use of bailiffs, without giving due time for forbearance.

The reality is that councils are dealing with an unprecedented level of debt. In March last year there was £5.5 billion of uncollected council tax alone in England and Wales. The increase in the number of Liability Orders is due to a backlog that accumulated as a result of a voluntary suspension of council tax collection during the pandemic and the resulting delays in court hearings. Enforcement agents are now supporting councils to recover historic arrears and help people to manage on-going liabilities.

In 2022, according to industry data, enforcement agents collected 21% of council tax arrears that could have been lost to the public purse and 20% of penalty charge notices for parking offences. When you consider that enforcement is the final option when there has been no response to letters, that’s a significant recovery rate and far exceeds most commercial debt collection.

It is equally important to recognise that this is the hardest debt to collect, which is at the end of the collection process. It is the final stage after all the efforts of creditors have failed to the point that they have applied to the courts for the power to recover funds owed. The recovery of council tax arrears provokes particularly emotional responses, but not often from those with direct experience.

Even with good collection rates, our own data shows that around 32% of council tax cases and 5% of parking cases passed for enforcement are not actioned.

This may be due to an intervention by the council, for example where an enforcement agent traces a new address or identifies a new occupier. It may be a case where vulnerability has been identified and it is judged inappropriate to pursue enforcement action.

There is a common assumption that enforcement agents demand payment at all costs. This is an outdated view that has no basis in modern civil enforcement.

Cases in which an individual has no means to pay and no goods of any value accounts for approximately 39% of cases for council tax and around 11% for parking debts. In around 24% of unexecuted cases for council tax and 60% of parking cases enforcement agents are unable to locate the debtor after trace enquiries.

Assumptions about how enforcement agents conduct themselves often dictate the narrative about the civil enforcement process. Enforcement agents are highly professional and licensed to act on behalf of the courts.

An enforcement agent’s certificate is granted by the County Court and must be renewed every two years. To qualify, the enforcement agent must satisfy a judge that they have a sufficient knowledge of the law and procedure evidenced by Level 2 or equivalent Training in the Taking Control of Goods Regulations 2013.

The procedure for licensing enforcement agents was part of the reforms introduced with The Taking Control of Goods Regulations, which were implemented ten years ago. Arguably, the regulations are no longer fit for purpose and present a simplified version of modern enforcement. This leads to calls for reform based on inaccurate information that presents no evidence that there will better outcomes for debtors, only different ones.

Most recently, the Welsh Parliament debated a Bill for the further regulation of debt collectors, which was targeted specifically at the use of enforcement agents recovering debt for Welsh local authorities. The bill was predicated on concerns about the use of ‘bailiffs’ to force fit prepayment meters in the homes of vulnerable people. This issue has been conflated with debt collection and civil enforcement. For clarity, bailiffs or enforcement agents as they are known do not fit meters and operate under different stricter regulations.

This is one of the most common points of confusion.

Civil enforcement agents are not debt collectors and are only used after councils have been unable to collect the debt themselves and have taken an individual to court. It is complex, highly specialised, and essential work that is needed to recover lost revenue for local and central government. It helps to sustain vital public services, while continuing to deliver the referrals, advice and support people in debt. A key difference is that enforcement agents are entitled to visit premises and gain peaceful entry. Debt collectors have no such authority.

These visits are closely controlled and monitored for compliance. Enforcement agents wear body-worn cameras to record enforcement visits on film. Video footage is constantly reviewed to monitor agents’ conduct and performance. Agents’ vehicles are often tracked by satellite and their phone use can be monitored and call centre calls are recorded. This degree of monitoring means that standards are maintained and complaint levels are very low.