House of Lords Questions – Bailiff fee Commission paid to local authorities

[outlawla]

Future Business

 

Tuesday 14 May at 2.30pm

 

Lord Lucas to ask Her Majesty’s Government what assessment they have made of arrangements whereby local authorities require bailiffs to pay them part of the fees that bailiffs have charged to debtors.

[brassnecked]

Future Business

 

Tuesday 14 May at 2.30pm

 

Lord Lucas to ask Her Majesty’s Government what assessment they have made of arrangements whereby local authorities require bailiffs to pay them part of the fees that bailiffs have charged to debtors.

Will keep an eye on this one, as the council s taking a percentage could be seen as profiting from enforcement and therefore illegal. Wonder if the old buffers in HOL will condone it as it is state debt?

[outlawla]

Will keep an eye on this one, as the council s taking a percentage could be seen as profiting from enforcement and therefore illegal. Wonder if the old buffers in HOL will condone it as it is state debt?

 

I agree, this is UK plc in action.

 

When you have figures like Communities and Local Government minister Baroness Hanham influencing Local Government Bills and blocking all attempts to introduce sensible policies base on the real world, one arguable point would be that paying councils a commission on fees would breach the Council Tax (Administration and Enforcement) Regulations 1992.

 

Schedule 5 of the regulations describe the composition of certain charges as "Reasonable costs and fees incurred". Because legislation was passed in parliament to apply to in-house enforcement, this woud not have allowed for profit or to cover overheads of a private firm.

 

The fees currently charged by private bailiffs must already be considered unreasonable due to the fact they are making profits and creating millionaires. If a bailiff firm is able to shoulder the loss of handing back a percentage to the council, this must be evidence to support a breach of the law because any commission paid back to the council, cannot by definition be considered "Reasonable costs and fees incurred".

Edited May 12, 2013 by outlawla

[tomtubby]

Excellent post of yours ( once again)

 

As I have recently said on another thread: "I will post further details later today ( a very large garden to tend to and blueberry muffins waiting to go in the Aga)".....

[brassnecked]

I agree, this is UK plc in action.

 

When you have figures like Communities and Local Government minister Baroness Hanham influencing Local Government Bills and blocking all attempts to introduce sensible policies base on the real world, one arguable point would be that paying councils a commission on fees would breach the Council Tax (Administration and Enforcement) Regulations 1992.

 

Schedule 5 of the regulations describe the composition of certain charges as "Reasonable costs and fees incurred". Because legislation was passed in parliament to apply to in-house enforcement, this woud not have allowed for profit or to cover overheads of a private firm.

 

The fees currently charged by private bailiffs must already be considered unreasonable due to the fact they are making profits and creating millionaires. If a bailiff firm is able to shoulder the loss of handing back a percentage to the council, this must be evidence to support a breach of the law because any commission paid back to the council, cannot by definition be considered "Reasonable costs and fees incurred[ Exactly outlawla/I]".

 

They adhere to the letter and the spirit of the law, only when it suits them, but if joe public transgresses it's down on him like a ton of bricks, with sledgehammers smashing nuts.

[outlawla]

They adhere to the letter and the spirit of the law, only when it suits them, but if joe public transgresses it's down on him like a ton of bricks, with sledgehammers smashing nuts.

 

But the obviousness seems to cause no embarrassment for them. The selective, blind-eye approach taken is one thing, but taking the biscuit must be the ironic way Fraud Hotlines are promoted on every item of paperwork that comes through your door.

[brassnecked]

But the obviousness seems to cause no embarrassment for them. The selective, blind-eye approach taken is one thing, but taking the biscuit must be the ironic way Fraud Hotlines are promoted on every item of paperwork that comes through your door.Perhaps we should file reports to these hotlines whenever a bailiff or council commit fraud, and flood them with reports, maybe they will get the message, or more likely shut the hotlines down.

[HCEOs]

The idea of Local Authorities demanding commission payments from Bailiff Companies is absolutely outrageous as we all know who is going to pay it.

[outlawla]

The commission is only part of the story. What about the added administration they have to take-on to win the contract? This amounts to the same thing.

 

You now not only have private bailiff firms profiting from enforcement but councils themselves.

Edited May 14, 2013 by outlawla

[tomtubby]

I have personally written many letters on this subject (even to Lord Lucas) and sadly, this frankly unethical, underhand, immoral "practice" has been ongoing for a long time.

 

Probably the worse examples are the agreements between local authorities that "contract out" their "back office" service to companies such a Capita and where despite legal tendering requirements, the bailiff enforcement contracts are awarded to none other than......Equita Ltd and Ross & Robert Ltd ( both of which are owned by Capita Plc !!!).

 

Also, how is it possible that such a large local authority such as City of Westminster can be permitted to award a 25 year contract to Capita for the enforcement of council tax and NNDR !!!

 

What makes the position really laughable is that for a long time enforcement companies have been lobbying Parliament very hard indeed for a change to the statutory fee scale as they "claim" that the fees scale does not cover the true cost of enforcement. And yet, those same bailiff companies are able to "afford" to pay a "kick back" to the local authority!!!

 

There is fault on both sides but without doubt, the local authorities that are insisting on such "kick backs" are frankly disgraceful. Admittedly, there are many people who for one reason or another fall behind with their council tax. The local authority are making an "absolute killing" on the summons costs which typically equals approx 15% of the average Liability Order (PS: I have undertaken a LOT of research into this).

 

The outstanding council tax debt AND summons costs etc is then sent to the relevant enforcement company and the LA also then receive a FURTHER sum of money by way of a "kick back" from the bailiff provider.

 

As can be seen from this scenario, the Local Authority are making a lot of money from the most disadvantaged members of the public.

 

Lastly, the local authorities who agree a "kickback" are failing to abide by the National Standards for Enforcement Agents which states very clearly the following:

 

"Creditors must not seek payment from an enforcement agent or enforcement agency in order to secure a contract !!!!

[caledfwlch]

If you reversed this, if bidding Bailiff firms were to approach Council Managers with a proposal to hand over fees, take over tasks etc if they are awarded the contract, then the Bailiff firm would find itself up in front of a Court for Bribery etc, I bet!

[outlawla]

If ever proof was needed that these people (Baroness Hanham especially) live in a bubble completely isolating them from the real world, the transcript of yesterday's House of Lords questions is it.

"

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham):

My Lords, under the provisions of the council tax regulations, local authorities are entitled to make charges to cover the costs of actions that bailiffs are taking. Those charges belong to the local authority. How those are then divided between the local authority and the bailiffs is a matter for them. Following the Transforming Bailiff Action consultation, the Government are currently implementing proposals to introduce a new, clear fee structure for bailiff action, which will be applicable across all debt areas

.....

[brassnecked]

If ever proof was needed that these people (Baroness Hanham especially) live in a bubble completely isolating them from the real world, the transcript of yesterday's House of Lords questions is it.

"

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham):

My Lords, under the provisions of the council tax regulations, local authorities are entitled to make charges to cover the costs of actions that bailiffs are taking. Those charges belong to the local authority. How those are then divided between the local authority and the bailiffs is a matter for them. Following the Transforming Bailiff Action consultation, the Government are currently implementing proposals to introduce a new, clear fee structure for bailiff action, which will be applicable across all debt areas

.....

 

Washing of hands like Lady Macbeth. They are clueless.

[Mark1960]

So basically,not happy with the huge profits made on obtaining liability orders,huge profits made on bedroom tax (which is not passed on to the people living in overcrowded conditions),they are now going to increase bailiff charges to accommodate a "cut" for the councils.

 

No other industry to my knowledge obtains contracts and then gives the customer "commission" on work carried out-Usualy it works the other way round.Bailiffs often claim that they are able to recover debts without added costs to local authorities-Now they will have the added dimension to claim that not only is there any added costs but they are actually bringing in extra revenue.

 

As per usual,the most disadvantaged & vulnerable within society will be footing the bill.

[Mark1960]

Washing of hands like Lady Macbeth. They are clueless.

 

Far from being clueless,they know exactly what they are doing-The "new,clear fee structure will be higher than the existing unclear fee structure to enable the councils to make a killing on peoples misfortune.

[tomtubby]

I hate to say this but in fact, Baroness Hanham is actually 100% CORRECT. It is complicated and I will respond sometime later when i have more time.

 

 

Hopefully, this will be cleared up with the new regulations.

[outlawla]

The only thing setting apart the criminals housed in our jails and those occupying Westminster is the latter had good sense to pick careers aligning with the wishes of the state and so qualify for taxpayer's money for doing dirty work like introducing oppressive policies.

 

What kind of mind, other than criminal, could have devised CTAX enforcement regulations, which, for 1 or 2 late payments gives councils the power to demand immediately the full year's liability, where even making payments monthly was causing difficulties.

 

The same devious characters must have been mindful of the £millions this would generate for local authorities each year because of the inevitable millions of householders who would be caught out each year.

 

For ratepayers struggling (but making payments), the government – with this flawed (or intentionally devised) legislation – has given councils the green light to appoint bailiffs to intimidate and coerce payment from householders already paying.

[josephbloggs]

Surely this is bordering on bribery

"Oh go on give us your work, we will give you a cut of the profits"

[tomtubby]

Below is a copy of Lord Lucas's debate in the House of Lords on 14th May:

 

 

Bailiffs

 

Question

 

2.36 pm

 

Asked by Lord Lucas

 

To ask Her Majesty’s Government what assessment they have made of arrangements whereby local authorities require bailiffs to pay them part of the fees that bailiffs have charged to debtors.

 

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham): My Lords, under the provisions of the council tax regulations, local authorities are entitled to make charges to cover the costs of actions that bailiffs are taking. Those charges belong to the local authority. How those are then divided between the local authority and the bailiffs is a matter for them. Following the Transforming Bailiff Action consultation, the Government are currently implementing proposals to introduce a new, clear fee structure for bailiff action, which will be applicable across all debt areas.

 

Lord Lucas: My Lords, I very much look forward to the introduction of the new system but, even in these hard times, should we not discourage local authorities from adding to the costs borne by the poorest members of society? If local authorities need to raise money, should it not rather be from the richer?

 

Baroness Hanham: My Lords, the noble Lord knows very well, because he takes a deep interest in these matters, that there has been great concern about the fees charged by and the arrangements made with bailiffs. The consultation, which has now finished, will result in a clear description of what the fee structure should be, how local authorities are to charge for it and what will be the open and clear arrangements between local authorities, bailiffs and the debtors in question.

 

Lord Elystan-Morgan: My Lords, may I make a wider point? Can the noble Baroness assure the House that when court bailiffs are appointed they are appointed by circuit judges and are enjoined to discharge their duties with humanity and courtesy? Should not the same precept apply exactly to bailiffs acting for local authorities?

 

Baroness Hanham: My Lords, it is extremely important that bailiffs are under no illusion about how they should behave when they have to take on a debt. As the noble Lord says, they should be courteous and caring, and that will be in the guidelines, which are being produced as we speak and are almost ready. They will give clear guidance as to how bailiffs should behave and operate.

 

Lord Shipley: My Lords, will those guidelines explain why some local authorities are considering implementing a charging regime and taking part of the bailiff’s gross fees? Is there not a clear conflict of interest when a local authority appoints a bailiff, supervises a bailiff and then shares in the gross fees of that bailiff?

 

Baroness Hanham: My Lords, as I said initially, the local authority is entitled to come to arrangements with bailiffs on fees and whatever charges are made. The guidance will make clear what local authorities can do, but I agree with the noble Lord that anything that looks like a cosy arrangement between the bailiffs employed and local authorities is thoroughly undesirable.

 

Lord Campbell-Savours: Can we be assured that the fee structure would preclude the local authority making any profit?

 

Baroness Hanham: My Lords, the local authority’s responsibility is to retrieve the debt in any way it can. I think the noble Lord is referring back to the Question about what arrangements are made with the debtors who are going to collect those debts, financially. I have said pretty clearly that there will be very clear guidance on what they can and cannot do, and that cosy business arrangements are thoroughly unsatisfactory.

 

Lord McKenzie of Luton: My Lords, what assessment have the Government made of the consequences, including the use of bailiffs, of increased indebtedness to local authorities arising from the localisation of council tax benefit with the 10% funding cut?

 

Baroness Hanham: My Lords, the burden on local authorities for collecting any debt is something that they will have to work out for themselves. I do not think any assessment has been made of any additional burdens from the council tax support system, which is what the noble Lord is asking about. Again, it will be up to local authorities to make their own arrangements.

 

Lord Cormack: My Lords, my noble friend will know that when the noble Baroness, Lady Meacher, moved an amendment earlier this year the House voted decisively on this issue of bailiffs. Can my noble friend assure me that the noble Baroness, and others who led this campaign, are being consulted on these guidelines?

 

Baroness Hanham: Absolutely, my Lords. The noble Baroness, Lady Meacher, came to see me a little while ago with the chief executive of an organisation called Zacchaeus, which is deeply involved in this. We have made sure that they have been consulted and have kept closely in touch with them over the guidelines. Therefore, I can be sure that when the guidelines are produced, it will be done with the support of those who were concerned about what was happening.

 

Lord Laming: My Lords, can the Minister assure the House, following the question of the noble Lord, Lord Campbell-Savours, that the part of the fee that goes to the local authority will in no case exceed the cost to the local authority of calling in bailiffs?

 

Baroness Hanham: My Lords, the guidance on the fees will make that pretty clear.

 

Lord Christopher: My Lords, the first Question from the Minister’s own Benches was very apt. The Financial Times reported a couple of days ago that there had already been a significant rise in the scale of unpaid rent to local authorities because of the changes in housing benefit. What advice will the Government give to local authorities, since if bailiffs turn up people will not only have no home but no furniture either?

 

Baroness Hanham: My Lords, the changes to housing benefit are relatively new so I am not sure what the article was about. I can say no more, other than that local authorities will be expected to work closely and sensibly with bailiffs in a proper way.

 

Lord Marks of Henley-on-Thames: My Lords, if local authorities are to pay commission to bailiffs, is there not a very real concern that those same local authorities will act more aggressively in enforcement than they might otherwise do?

 

Baroness Hanham: My Lords, local authorities enable bailiffs to charge fees; that is the financial arrangement between them. On the question of the debt that is owed to the local authority, it will collect that in whatever way it can but the fees charged are the bailiff’s concern.

[tomtubby]

As many people on here may be aware, I have a commercial business advising debtors regarding bailiff issues and since Lord Lucas's questions were made public I have received many questions and it may assist if I outlined some important points:

 

Firstly the above debate relates to queries regarding fees for the collection of debts due to LOCAL AUTHORITIES. It does not relate at all to debts that are due to HMCS in relation to court fines.

 

The new regulations are planned to be introduced in April 2014 and there will be a very much simpler fee scale which will consist of two stages. At present the only debts that have this type of charging structure are HMCS Magistrate Court Fines ( which consist of an "admin fee" of £85 followed by a personal enforcement fee of £215).

 

This new fee scale will allow all enforcement companies (including High Court Enforcement Officers) to charge an "admin" fee to the debtor's account as soon as the debt is passed to them. This is NOT a letter fee and will cover all of the administrative costs including letters, phone calls to debtors, managing payment arrangements etc. The costs will likely be similar to that currently charged to enforce court fines (£85). The visit fee is likely to be slightly less than is currently charged by the companies enforcing unpaid court fines.

 

I have been posting on the forum here for about 6 years and I have constantly stressed the importance of WRITING to the local authority etc. With the new fee scale it is so important that debtors respond to the initial letter immediately so as to avoid the (approx £200 visit fee). Given the way in which so many people now place such reliance on mobile phone and i-Pads etc my worry is that they will NOT write a letter. We will just have to wait and see.

 

The Ministry of Justice is still working with various "stakeholders" to discuss the new regulations and hopefully, "draft" regulations will be introduced before the summer recess.

 

As a member of the Enforcement Law Reform Group, I submitted a very lengthly and detailed response to the Ministry of Justice's consultation paper on Bailiff Reform and I will be posting back frequently with further news.

[wonkeydonkey]

TT.

 

I see on another smaller forum the owner is also a member of the Law Reform Group and he is inviting members to make contact with him in order to raise their questions by booking rostrum time at the forthcoming symposium of 13th June, We all appreciate you have a heavy workload yet still find time to come on Cag and offer your much welcomed advice but would you also take questions from members and raise them at the symposium...they do say there is strength in numbers??

[tomtubby]

Thank you for your PM and link to the relevant web page.

 

The Enforcement Law Reform Group has spent many years lobbying Parliament for better regulations of the bailiff industry. I have been a Member of ELRG for approx 6 years and I can ASSURE you that person is NOT a member of ELRG !!

 

Furthermore, the Enforcement Law Reform Group (which is chaired by Lord Lucas) had a meeting at the House of Lords on 25th April. To my knowledge the ELRG does NOT have another meeting planned for 13th June 2013 !!!

 

PS: This is very naughty indeed. I will be making some "background" enquiries.

Edited May 16, 2013 by tomtubby

[wonkeydonkey]

Sorry TT it was not a 'dig' at him.... I was genuinely thinking my suggestion might of served a purpose to members of cag.

I actually thought it was as it reads

 

"Also, Lord Lucas chair of the Enforcement Law Reform Group will be speaking at their symposium in London on 13 June 2013 to explore the next steps following the government consultation paper Transforming Bailiff Action.

If you have a question or a matter you would like to raise, please post it here or PM me and I'll try and get an allocation to the rostrum"

and this was a member of the said Reform Group therefore I was prepared to gave the post the 'benefit of doubt.

sadly it would seem to be yet another 'fantasy'?

 

WD

[wonkeydonkey]

Can I just ask....do you have to be a member to attend meetings of the Enforcement Reform Group and take the 'rostrum' to raise issues? I only ask, as clearly the post alludes to the writer being a member and therefore positioned to act in any capacity to put forward his members suggestions and questions.

Edited May 16, 2013 by wonkeydonkey

[EWHC1362]

....When you have figures like Communities and Local Government minister [see link in original post] influencing Local Government Bills and blocking all attempts to introduce sensible policies base on the real world, one arguable point would be that paying councils a commission on fees would breach the Council Tax (Administration and Enforcement) Regulations 1992.....

 

In the link, Baroness Hanham states:

 

 

The local authority is allowed to apply for only reasonable costs, and those are capped at £70.

 

This is quoted from the Lords on 24 July 2012 in a debate about the Local Government Finance Bill. But in a wider context....

 

Under the Council Tax (Administration and Enforcement) Regulations 1992, bailiffs can be used to recover unpaid council tax-that is, levy distress-only where a magistrates' court has made a liability order. That was the point made by my noble friend Lord Lucas.

 

The local authority is allowed to apply for only reasonable costs, and those are capped at £70. There will be further costs only after distress from the bailiffs is levied. I agree with the noble Lord, Lord Smith, that a great deal of work is involved before schedules are produced before the court-I used to deal with them frequently, and magistrates do not just wipe them through; a lot of questions are asked.

 

 

 

In relation to reasonable costs being capped at £70 and the statement that magistrates do not just wipe them through, does anyone know what Baroness Hanham was talking about?