Local authorities could save ‘thousands of pounds’ by using digital debt recovery, a new report argues.
As of March 2017, around £2.8bn of outstanding council tax was owed to local authorities in England — debt that is normally recovered through the use of external enforcement agencies.
A new report from the international data solutions company Esendex argues digital debt recovery would be a more cost-effective method than the use of such agencies.
The report claims that digital debt recovery would cause less stress to the debtor and would mean a greater percentage of debts are paid off.
Christians Against Poverty (CAP) recently found people chased for council tax debt and benefit overpayments were 41% more likely to consider suicide than those with only private sector debt.
Esendex found that, out of 109 authorities surveyed, 68% were unable to say whether the costs of collection exceeded the monies recovered.
Councils would spend less in the long run with digital debt recovery, Esendex's report says.
‘The collection of debt is ripe for the introduction of simple solutions which can significantly improve the financial position of authorities responsible for recovery whilst delivering a better service to citizens,’ said Sean Sutton, Esendex’s head of public sector.
‘The competing demands on council funding are greater than ever and reforming a “back-room” function like debt recovery could free up significant sums of money to spend on frontline services.’