Increasing Council Tax Collections - Orders for Sale

In 2016/17 Local Authorities collected a total of £26.6 billion in council tax which was a 5.1% increase on the collection figures achieved in the previous year. The average in year collection rate was 97.2%. Behind the successful increase in collections however is the far more worrying story of what is not being collected. As at 31 March 2017 £2.8 billion of council tax was still outstanding for collection. This was an increase of 3.7%. In 2016/17 alone, Local Authorities wrote off £172 million of uncollectable council tax.

In the current climate as budgets tighten and Local Authorities are increasingly having to make difficult and painful spending choices, the pressure to maximise council tax collections and draw in some of the £2.8 billion of outstanding debt has never been greater.

One of the most used tools in a Local Authorities collections toolkit for non payers is the approach of obtaining a charging order to secure the council tax owed. This is a simple and cost effective option, particularly for a non responsive debtors, which provides security for the debt and allows what limited resources the Local Authority has to be used to maximise collections from those who are willing to engage. The charging order provides the (theoretical) promise of payment at a later date, once the debtor is suitably motivated to settle their debts or to run a challenge as to liability. Alternatively the Local Authority awaits the day when the customers property is sold by choice or by the forced action of another creditor.

The problem is that over the years debtors have become wise to the above approach. They realise that very often a Local Authority will secure many years of council tax debt with multiple charging orders without ever taking further action. In this situation, they realise that the approach provides an often interest free loan for their council tax liabilities.  Further as years of charging orders have built up  the value of the sums secured increases. During times where there are no budgetary pressures this may not be a pressing issue. In the current climate however as Local Authorities face the unenviable choice of which important services to reduce  the natural question is can they afford to continue building up mountains of secured debt which may take years to turn into cash?

Time for a change of approach?

The reality is a charging order is rarely obtained with the intention of giving a debtor an indefinite period of time to pay the underlying debt. Charging orders for Council Tax should be no different.  At J & P Credit Solutions we have worked with local authorities to assist them in maximising their Council Tax recoveries. In the current climate is vital for all Local Authorities to assess their portfolio of secured council tax cases and consider which might be appropriate for further enforcement action, notably proceeding to obtaining an Order for Sale.

A creditor can make an application for an Order for Sale to enforce a charging order they hold over a debtor’s property. Given the seriousness of an Order for Sale for the debtor, merely the threat of moving from a Final Charging Order to an Order for Sale will often result in renewed or first engagement with the debtor and the payment of, or the instigation of a payment plan for, the outstanding monies owed.

There are clear reasons why it is increasingly important for Local Authorities to add the ultimate escalation of an order for sale to their collection armoury:

  • The growing volume and value of unpaid charging order
  • The current property market: any charging orders held are only as valuable as the properties they are secured against. In a turbulent property market there is increased risk that there will be insufficient equity to cover the debt owed
  • Sending a clear message to serial non payers e.g. certain landlords of HMO’s, who treat the repeat charging order approach as a method of securing often interest free loans from the council.
  • The growing pressure to increase cash recoveries

How can we help ?

J&P Credit Solutions has developed a cost effective and efficient service which will help to ensure you maximise the cash collection from your historical charging order book. The service includes:

360 degree review of existing Charging Orders – We appreciate that order for sale action should only be taken as a matter of last resort and it is not appropriate in all cases. We will help you to identify those cases where action is appropriate. Further we will use our expertise to identify those cases which are most likely to lead to a successful outcome.

Treating Customers Fairly and Vulnerability – We provide our service with a keen eye to ensuring that no matter what stage of action we are at, we treat customers / debtors fairly and further ensure we identify those individuals who may be vulnerable and who might require assistance. We work with our clients to ensure that  where vulnerabilities are identified we halt the action and ensure the individuals are protected.

Cost Neutral Pricing - We have a reputation for delivering innovative cost neutral pricing solutions wherever possible for our local authority clients. Our shared risk pricing structure on these cases means we are as committed as you are to ensuring a successful outcome. Our objective is to deliver a cost neutral solution to our clients and where possible we seek to recover the costs you incur back from the assets released by the sale of the property. 

Reputational Risk Management – We are committed to managing the reputational risk to the authority. We will work with you to provide impact statements for members on the proposed use of order’s for sale. We also provide regular reports on the activities undertaken on your behalf, to show how the process can enhance, rather than undermine, your reputation.

Complete Transparency – We provide our clients with 24/7 online access to all of their cases, so they can easily view at a glance precisely what action has been taken on any of their cases. We also work with clients to provide vital management information which can be used to measure the increased recoveries and return on the activity.

About Us

The Local Authority team, headed by Rachel Addai, collect a wide variety of debt types on behalf of many major authorities in London and the Midlands. They have an excellent reputation for the quality of advice given, services delivered and importantly for the successful recovery of amounts owed at the lowest possible cost to the authority.

Rachel’s recommendations by her clients have led to her being listed in the Legal 500 as one of the leading specialist debt collection solicitors in the South East. Please feel free to contact Rachel directly on 020 8290 7356 to discuss the Orders for Sale service or any other Local Authority debt recovery issues. Alternatively email Rachel at

J&P Credit Solutions are the specialist debt recovery division of Judge & Priestley LLP solicitors. We have been providing solutions to our clients’ debt recovery issues since 1889. We always endeavour to enhance the strong reputation we have built over the years for the quality of our service, our innovative cost neutral fee structures and the successful outcomes we deliver to our clients. The business is regulated by the Solicitors Regulatory Authority and has additional independently audited accreditations for our practice management procedures - Lexcel and information security management - ISO 27001.

Contact us today for your free, no obligation debt recovery review

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