Recent reports have highlighted the social dilemma that we face as an outcome of the Covid-19 pandemic. Our social justice system requires that every citizen makes their contribution to society by paying their taxes and abiding by common law. The economic impact of the pandemic has created huge shortfalls in local government budgets and exacerbated the financial vulnerability of some people. There has never been a time when the need for collaboration between creditors and debt advisers has been greater.
Whereas before civil enforcement was a function of the social justice system and those who wilfully refused to pay their debts to central and local government were rightly pursued through the courts and appropriately dealt with, now many won’t payers are becoming can’t payers. The debt advice sector needs to work even more closely with the professionals tasked with recovering losses to the public purse. The enforcement process is adapting to a new critical role.
People affected by life shocks as a result of the pandemic are often invisible to the authorities and debt advice sector until enforcement action is taken and agents visit people at home. The enforced lockdowns and local restrictions have made regular engagement more necessary to enable people to manage their debts.
While the policymakers consider how to respond to a new social agenda, CIVEA and its members continue to work in partnership with the debt advice sector. We want the best outcome for people in debt and when there are shortcomings or opportunities to improve our operations, we recognise and address these. In collaboration, business and the voluntary has successfully resolved debt issues and supported vulnerable people.
As well as providing significant financial support, through FairShare contributions, our members fund local debt advisers working in citizens advice bureaux and council offices. Debt advice experts provide training on vulnerability to enforcement field agents and contact centre operators, and all CIVEA members have very strong local relationships with the voluntary organisations. Enforcement firms have dedicated welfare teams or welfare officers, depending on the size of the business, who work with debt advisers and are empowered to put cases on hold and negotiate payment arrangements. They have access to the same affordability and assessment tools as any commercial credit collector.
There is consensus on many policy issues that have been highlighted by the pandemic, such as the shared belief that councils should co-ordinate information about debts held across different departments; data and technology could be used more effectively to develop metrics for reporting on debt recovery and letter and other statutory communications should be revised to reflect the need for a more sensitive approach from public authorities.
We continue to press the government for greater flexibility in the language used in letters and documents, including signposting to free debt advice. Default Notices are designed to give people who are falling behind on their debts fair warning before lenders take further action. However, the statutory requirements of these communications has not been updated for 40 years. The letters borrowers receive from commercial credit providers when they are behind on repayments will be easier to understand and less intimidating as a result of new rules proposed by the Treasury this month. CIVEA has urged the government to extend this review to default letters and other communication from local authorities. Currently, these communications remain heavily prescribed under the Tribunals, Courts and Enforcement Act 2007.
The flexibility to adapt all communications, provided this does not contravene regulations, can ensure that all individuals are treated fairly and equitably. Our own evidence shows that a softer approach in early-stage communications can elicit a good response from people in debt, including potentially vulnerable people. That is why CIVEA members devised sensitive communications in a universal template letter in response to the Covid-19- crisis and CIVEA members provided flexibility around payment breaks, forbearance and additional support. In some cases, our template reconnection letters were amended in response to local council requirements.
We also support periodic reviews of repayment plans to check for changes in circumstances, alongside alternative collection routes and better promotion of the support available for vulnerable people.
We can all agree that is important that local authorities have an accessible and transparent complaints process in place for anyone who wishes to dispute a debt or register a complaint against the conduct of public servants. This obligation extends to enforcement agents and other third-party service providers that contract with local authorities. Where they are acting on behalf of public bodies, they should be accountable for their conduct. That is why CIVEA have voluntarily mandated the use of body-worn cameras for all their enforcement agents. We continue to align ourselves with the debt advice sector in calling for the draft Public Service Ombudsman Bill to be given parliamentary time. The planned legislation has cross-party and cross-industry support.
Commentators often try to create a friction between enforcement agents and the debt advice sector. This binary debate ignores the close working relationships that CIVEA members have with the advice sector at a local and national level. Differences of opinion are always magnified and scrutinised more than similarities and common ground. But it is encouraging to read the broad-ranging agreement and over-lapping views in our individual responses to the Cabinet Office call for evidence on public debt management. Such synergy will ultimately lead to better public policy and better outcomes for those who face severe financial pressures as a result of the Covid-19 pandemic.
Russell Hamblin-Boone, Chief Executive Officer at Civil Enforcement Association (CIVEA)