The stark reality is that many households are having to make the difficult decision between heating their home and putting food on the table. The financial crisis facing our country is having a profound effect on some of the UK’s most vulnerable residents, exacerbating an already desperate situation.
Now more than ever, ethical collections and improving customer relationships are key to how local authorities operate, as they play a central role in supporting people through the cost of living crisis.
The need for collections officers to be able to have personal conversations with those most in need, in order to build relationships and find solutions to individual requirements (like affordable payment agreements or welfare advice), is vital. Vital for residents, but also vital for local authorities affected by a global pandemic and now having to tackle a financial crisis that is sharply reducing resources, growing bad debt provision, and increasing fraud and insolvency.
In what is turning out to be a period of significant hardship, where the UK stands on the edge of a precipice, trying to maintain revenues, while engaging meaningfully with residents who are having difficulty paying, can seem like a nigh on impossible task. So where do you begin? Local councils need to review their processes and procedures, re-evaluate their resources and, most importantly, collect debt with care. Through the use of digital innovation, organisations can quickly change traditional collection methods, improving resident and staff wellbeing, while at the same time increasing Council Tax collection rates.
Collection methods need to evolve now
There’s no doubt that the cost of living crisis is set to worsen, and with inflation predicted to reach 18% in the first quarter of 2023, those who may have never been in arrears could slip into debt.
Early intervention by engaging with new and current debtors is the best way to collect income and help debtors before they become trapped in the debt cycle. This also helps authorities to conduct a bespoke vulnerability review.
Investing in modern solutions to seamlessly engage with residents and collect with care is no longer a choice – it’s a necessity, and technology can play a key part to ensure local authorities meet their in-year collection targets. Whereas the drive over the past few years has been towards self-service models, the current climate demands a more personalised approach to collections. As such, local authorities must find ways to engage with debtors and collect in a sensitive way – rather than at all costs – while at the same time facing tightening budgets and mounting arrears, from rent to Council Tax (CT).
In short, the demand to do more with less creates a significant challenge. While self-service solutions offer control over how residents interact with their local council, the need for personal human intervention and considerate collection methods is essential in today’s environment.
But what part does technology play in facilitating that change? Technology harnesses the power of behavioural insights, data science and digital communication to automate inefficient manual processes – such as sending letter reminders – and drive inbound calls from residents who want to discuss a solution. This frees up capacity for more personalised one-on-one conversations that result in positive outcomes, reducing the strain on local council teams while improving resident engagement and collection rates.
In essence:
- Officers have more meaningful conversations focused on finding solutions – engagement
- Automated calls can result in increased collected revenue – revenue
- Warm inbound calls eliminate officer time spent on call preparation for at least 10x FTE efficiency – efficiency
- Residents have elected to engage and look for a solution to their problem. This results in a greater chance for a positive experience. What’s more, officers’ work is more interesting, pleasant and effective – satisfaction and wellbeing
- Humans intervene only when optimal – automation
- Authorities can rapidly and easily increase or decrease workloads across different types of work, without adding officers and with zero cost impact – scalability.
The financial crises will touch everyone, including two generations that have experienced affluent economic growth. Local government’s normal collection processes will come under immense pressure as the gap for the working poor gets wider.
Now is the time to concentrate on income maximisation and budget management campaigns, reviewing all policies linked to the ability to pay, and making an additional provision for bad debt.
If you would like to find out more about how technology can help to drive up ethical collections and improve resident engagement, download our latest free eBook here – https://info.voicescape.com/revs-bens-e-book
Sean Sutton is Head of Local Government at Voicescape – a customer engagement technology business providing solutions for local authorities and social landlords.
This article is sponsored by Voicescape.
