Council tax and business rates collections fall in Northumberland during pandemic
A county council report noted that one of the main factors was that hardly any enforcement activity has taken place so far this financial year due to Covid-19.
The mid-year debt recovery update, presented to the Monday, December 7, meeting of the authority’s corporate services committee showed that the overall in-year collection rate at September 30, 2020, was 55.2% and ‘is well below performance for prior years’.
Revenues and benefits manager Graeme Barnes highlighted that recovery action, which is usually an ongoing process and follows a strict monthly timetable, was disrupted during the first half of 2020-21, with the first reminders only issued in September and the first court date for council-tax liability taking place just a few weeks ago on November 20.
In 2019-20, the council issued 47,211 first or second reminders, but in the first six months of this year, the figure was just 7,773 first and zero second reminders. In a normal year, thousands of final notices, summonses and liability orders are also issued; there were none from March to September 2020.
Coming into 2020-21, arrears were already at their highest since 2013-14 at £11.6million, with the report attributing this to the 8% reduction in council tax support for working-age claimants, with many having a bill for the first time; the increase in customer contact as a result; the amount collectable in 2019-20 increasing by £13.3million; the volume of changes to accounts increasing(and contentious cases); an increase in new dwellings; and the impact of Covid-19 on collection in March 2020.
This meant that the council’s collection rate was 97.6%, against a target of 97.8%, although this was still the highest of the 12 North East local authorities and ‘well above the 96.8% national average for all local authorities in England’.
In relation to business rates, the picture is very similar, both in terms of arrears at March 31, 2020, being at their highest since 2013-14 – due to the impact of Covid-19 on collection in March – and the in-year collection rate at September 30 being below performance for prior years, at 56.6%.
The report also addresses the impact of Universal Credit (UC) as more and more claimants move across to this system.
It states that the collection rate for rent from council tenants claiming UC is 88.26%, compared to 97.61% for those not on that benefit. At September 30, 2020, tenants in receipt of UC owed a total of £838,588, with arrears solely as a result of UC totalling £375,192.42.
The report says: ‘Universal Credit poses a significant risk to rental income and current working practices have been reviewed in order to respond.
‘The new income officers and the wider teams are being supported to increase their knowledge in UC and working with partners to share learning and learn from best practice.’
Reflecting more generally on the situation during Covid-19, Mr Barnes added: “Everything we have done over the last six months, we have tried to be more flexible and take account of the difficulties that people are facing. It’s a case of trying to be as fair as possible.”