For many years bailiffs were known as being the hard edge of debt recovery with the power to enter homes and seize personal possessions, almost without restriction. The current reforms of the enforcement sector began with an independent review of bailiff reform in 1998. This was followed by a Green Paper on Effective Enforcement in 2001 and a White Paper in 2003. The most significant development was the Tribunals, Courts and Enforcement Act 2007 that detailed the powers and process for enforcing public debts. Up until this point, enforcement practices were not standardised, and each local authority and each enforcement firm had its own approach to debt collection.
The credit crunch of 2007 began the years of austerity that imposed harsh restrictions on government spending. This coincided with the abolishment of council tax benefit for low-income households, which gave local authorities the freedom to design their own council tax support schemes. With less funding from central government, local authorities needed to maximise revenue. Residents were pursued for long-standing debts and some households began to pay council tax for the first time.
While the Council Tax has proven to be a successful way to fund local government and is largely considered to be a fair tax, its introduction led to an increased use of bailiffs. Local authorities adopted a more rigorous approach to debt collection and placed a greater burden on enforcement agents through tougher targets, albeit still at no cost to the public.
However, since the credit crunch, every business sector has had to embrace a new level of corporate responsibility for data protection, public accountability and conduct. Enforcement now looks very different since the reforms of 2104.
Reforms of the enforcement sector culminated in new regulations for taking control of goods introduced in 2014, supported by a voluntary set of National Standards. This was a significant development that was welcomed by enforcement agencies, which saw an opportunity to distance themselves from the past. At the heart of the reform was the principle of fair and proportionate treatment of people in debt, with special attention to those who may be vulnerable. Along with an extensive training and certification process for enforcement agents, a new fee structure meant the charges for enforcement were fixed by statute and the operation of enforcement agents was highly prescribed.
The single most significant change was the implementation of an early intervention, known as the Compliance Stage. This gave anyone in debt advanced notice that an enforcement visit was due and provided a final opportunity to engage and make a payment arrangement. This halved the number of debts that were collected at the door.
There is strong evidence that the regulations have transformed the enforcement process and came with many benefits for residents.
Fewer people receiving doorstep visits means a much smaller fee is added to the debt. The simplified and statutory fee structure has reduced the number of complaints, which remain at extremely low levels. Enforcement agents have a greater awareness and training in all aspects of vulnerability and enforcement firms have developed specialist welfare support teams. All enforcement agents are externally verified and certificated by the courts and their employers are committed to act responsibly and support people who are in debt.
You can read more about civil enforcement reforms in our seminal report Reflection and Collection – the evolution of civil enforcement.
Just as the government claimed the years austerity were over, local authorities had to face a new and potentially greater challenge in the COVID-19 pandemic. Local finance plans were decimated as councils were required to implement new health and safety and set up testing and vaccinations centres. According to government figures, Councils are facing an estimated shortfall of £5.5 billion in their council tax collections going back several years.
It is important not to conflate debt collection and the impact on household debt levels, with the enforcement of unpaid taxes and fines owed to the public purse. Enforcement of public debt is specialist work that operates under regulations specific to this type of debt. However, civil debt is enforced using many of the same processes and technologies as private debt collection agencies, including credit reference checks, data analytics and extensive engagement prior to any enforcement visits. CIVEA’s members also identify and refer vulnerable cases to independent debt advice.
The first stage of enforcement is now almost entirely tech driven and designed to achieve early engagement with people who have not paid their taxes and fines and have been taken to court.
Enforcement firms use a range of technology:
The duty of care on creditors has been developed in the government’s policy on a breathing space introduced in May 2021. The breathing space applies to government-generated debt, such as council tax debt, unpaid Penalty Charge Notices and commercial rent for small businesses. In the case of public debt arrears, the creditor is the local authority and responsibility for a breathing space rests with these public bodies.
However, council tax debt recovery is only a proportion of the work that falls to enforcement agents. Enforcement agents execute warrants of control in respect of criminal fines. Many liability orders for council tax debt issued by local authorities are also due to failed payment arrangements, but fines are also imposed as a form of punishment meted out by the courts, often as an alternative to custodial sentences. While non-payment creates a debt, which can be recovered using the Schedule 12 procedure, warrants are mainly issued when a defendant fails to maintain a court-imposed payment arrangement. The justice system would be undermined if enforcement agents were too lenient and did not carry out the courts instruction to recover the debt or take control of good in lieu of payment.
The enforcement sector worked with the Centre for Social Justice and debt advice organisations to design an oversight body. The Enforcement Conduct Board (ECB) is an industry-funded, independently managed model of self-regulation that does not restrict innovation in a market that was responding rapidly to the needs of central and local government departments, but that recognises its responsibility to people who were struggling to manage their priority debts under additional financial pressure. There is more information here.
The case for enforcement is as strong as ever. There is clear public support for enforcement agents. According to a YouGov survey conducted in 2020, over half (56%) of adults believe councils should use bailiffs to try and collect unpaid council tax from people who can but will not pay. Almost two thirds (64%) of adults believe bailiffs should be used to collect unpaid fines imposed by a court.
Enforcement work is expanding with the need to enforce penalties for infringements in clean air and ultra-low emissions zones in our city centres. Enforcement firms support local authority zero carbon objectives with electric and hybrid vehicles that are mapped to ensure the most efficient routes are taken and fuel consumption is recorded. Firms sponsor debt advisers in local bureau and fund employment skills workshops as part of their social value contribution.
Essentially, enforcement is the recovery of debt as instructed by the courts, but the enforcement industry has evolved in response to social, economic and environmental conditions. It is comparable with any other business sector and is arguably leading reforms in local government debt management post-pandemic.
You can read more about civil enforcement reforms in our seminal report Reflection and Collection – the evolution of civil enforcement.
The enforcement industry has been on a path of reform since the review of civil enforcement agents in 1992, followed by the seminal Beatson report in 1998. Since then, there have 9 consultations, reviews and inquiries.
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