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Councils collected £300m more tax last year

By Vivienne Russell | 2 July 2013

Councils in England collected almost £300m more in council tax in the past financial year, although over £2bn remains outstanding, government figures have revealed.

The Department for Communities and Local Government last week issued the annual statistics on council tax collection rates. These showed that local authorities collected £22.4bn of £23bn owed in 2012/13. This compares with £22.1bn of £22.4bn owed in 2011/12. The cumulative amount of uncollected tax stood at almost £2.4bn last year.

The average collection rate was 97.4%. Shire districts were the strongest performers, with an average collection rate of 98.1%, followed by unitary councils (97.3%), London boroughs (96.4%) and metropolitan authorities (96.2%).

The five councils with the best collection rates were: New Forest; Bath and North East Somerset; Sutton; Aylesbury Vale; and Solihull.

Communities Secretary Eric Pickles said: ‘These figures show a welcome improvement in collection rates, but there is still over £2bn of unrealised income, which councils could use to support frontline services or cut council tax bills. These figures show the scope for sensible savings in local government.’

But the usefulness of the government’s data was queried by the TDX Group, which provides software to help organisations to better manage their debt collection.

The group took the top 100 English councils’ collection rates and benchmarked them against the private sector’s performance collecting debts such as unpaid utility bills in the same geographic area. It found that, in a third of cases, councils’ performance diverged significantly from that of the private sector. Sixteen were found to be lagging behind private sector, and a similar number were exceeding the performance of companies and firms.

Nick Georgiades, director of advisory at TDX, said English councils could be targeting their debt-collection activities more effectively.

‘Unless you have the most detailed picture possible of your performance, it is impossible to drive change and improvement – so this really is a matter of lost opportunity,’ he said.

‘Given the cost pressure all local authorities are under, a better understanding of current collection performance could actually help to identify where there might be scope to mitigate cuts by improving collection outcomes.’

 




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