Council tax collection rates dip in Northumberland, figures show

Plus, there are other factors which may explain why the overall in-year collection rate at the midway point of the current financial year (September 30) was 56% – below the performance for prior years.

This includes more residents taking up the option to split their bill over 12 direct debit payments rather than the traditional 10 months as well as the fact that there are more houses in Northumberland and more work for staff – the overall amount owed has topped £200million for the first time.

A report to a meeting of the county council’s corporate services committee on debt recovery explained that the in-year collection rate at September 30 for customers receiving council-tax support was 47.8%, compared to 49.0% at the same point last year.

The report to the meeting on Monday, December 9, notes: ‘While this is an indicator that the council-tax support changes may have had an impact on collection rates, caution should be exercised in the interpretation of this interim position until the year-end position is known.’

This is the first financial year since the authority agreed to cut the maximum level of council-tax support from 100% to 92%, which means that some households have received a bill for the first time in 2019-20. It has already been agreed that this will continue next year.

When the controversial cut was approved, the administration explained that for those affected by the changes, a collection rate of 83% would be assumed, based on the experience of other regional authorities.

Therefore, the overall target collection rate for this year is 97.8%, slightly lower than the actual 98.1% recorded in 2018-19, which was again the highest of the 12 North East councils and above the national averages of 97% for all English local authorities and 96.8% for unitary authorities in England.

In the first half of 2019-20, the council has issued 24,829 first and second reminders, 957 final notices, 8,639 summonses and 7,214 liability orders.

This compares to 39,598 first and second reminders, 2,885 final notices, 9,704 summonses and 7,846 liability orders across the whole of 2018-19.

‘The numbers have increased significantly from 2018-19 due to the 8% reduction in council-tax support for working-age customers, including those who previously had nothing to pay,’ the report notes.

Labour’s Coun Lynne Grimshaw, who was an outspoken critic of the cuts to council-tax support, raised concerns about this as well as the impact of Universal Credit (UC), with the report stating that it ‘poses a significant risk to rental income and our current working practices have been reviewed in order to respond’.

Full service UC was introduced in Northumberland in November and December last year and the waiting time for recipients is now five weeks.

This is reflected in the arrears of council tenants, with those in receipt of UC in rent arrears of £413.71 on average, which equates to 5.5 weeks of payments based on the average rent.

Coun Nick Oliver, the Conservative cabinet member for corporate services, pointed out that UC was not administered by the council, but said that there were ongoing efforts to support residents.

On council-tax support and collection rates, he added that the council was in a ‘quite reasonable position’ given that some people had never had a bill before, but that ‘we will keep a close eye on it’.