Taking Control of Goods (fees) Regulations 2014

The request was partially successful.

Dear Manchester City Council,

Theoretically, if an Enforcement Agent is instructed to recover a sum outstanding on a Liability Order of £420, the Taking Control of Goods (Fees) Regulations 2014 provides that the Agent may recover a compliance fee currently in the sum of £75. If the Agent then proceeds to the enforcement stage incurring a fee of £235, then to the sale or disposal of controlled goods stage, incurring a further £110, then the amount the Enforcement Agent may recover from the debtor would be a sum equal to the amount outstanding on the Liability Order.

If the debtor then pays a sum equal to the amount outstanding on the Liability Order, but no more than this, by virtue of the Regulations the enforcement agent is entitled to the entire sum originally owed, with the council seeing nothing from the recovery process.

Q. In respect of payments for outstanding Council Tax as in the above or similar, what (if any) measures have Manchester City Council in place (presumably contractual) that ensures monies are not diverted to enrich private companies and their shareholders that would otherwise have gone towards providing services (the purpose intended)?

Yours faithfully,

Paul Smith

Manchester City Council

Dear Mr Smith

Re: Request for Information - Reference No: COR/9K9HBZ

Thank you for your request for information received by Manchester City
Council on 19th May 2014.

Please note that it may take up to 20 working days (approximately 4 weeks)
for the Council to consider your request and to provide a formal response.

If this timescale needs to be extended to consider an exemption you will be
notified and kept informed.

If you have any queries, please do not hesitate to contact me.

Yours sincerely

Cath Cryer
Information Compliance Unit
Democratic Services
PO Box 532
Town Hall
Albert Square
Manchester
M60 2LA

Email: [Manchester City Council request email]
Website: www.manchester.gov.uk

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Manchester City Council

1 Attachment

Good morning Mr Smith.

I have attached a response to your recent FOI request about Enforcement
Agency Costs

I hope that this answers your question

Regards
Charles Metcalfe
Revenues Manager - Manchester City Council
Alexandra House
Moss Lane East
Manchester
M15 5NX

Internal tel: 800 6382
tel: 0161 219 6382
fax: 0161 274 7214

 

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Dear Manchester City Council,

Please pass this on to the person who conducts Freedom of Information reviews.

I am writing to request an internal review of Manchester City Council's handling of my FOI request 'Taking Control of Goods (fees) Regulations 2014'.

Re;

"The Council has no measures in place, as the level of costs and allocation of payments to costs and debt are covered by regulations within the Tribunals and Enforcement Act.

The assumptions made in the question are incorrect in respect of the new legislation and how it operates in practice. After clearance of the initial £75 administration fee, any further payments made by the debtor are used to clear the outstanding debt and further costs on a pro rata basis."

I assume Manchester City Council has referred to regulation 13 of the new legislation (the taking Control of Goods (Fees) Regulations 2014) in its response (Application of proceeds where less than the amount outstanding).

Regulation 13 implies that it provides only for the application of proceeds where goods are sold. However, even if pro-rata payments are applicable where goods are not sold, there is still potential, where proceeds are less than the amount outstanding, for substantial sums benefiting the Enforcement Agent which should be going to the public purse.

In cases where only a sum of £75 appears on the liability order and the debtor pays only that amount, then all those cases will result in the local authority seeing nothing from the recovery process and the contractor benefiting at the expense of the taxpayer.

Even in the original example (where the Enforcement Agent is instructed to recover a sum outstanding on a Liability Order of £420 and the debtor pays only that amount) then the local authority would only see £189.41 whilst the contractor would have diverted £230.59 from council services.

That is of course unless there are contractual rules imposed that would serve the public interest in that the contractor is paid only when the full amount outstanding is recovered, thereby giving maximum benefit to the public purse.

Monies diverted from funds available to spend on public services in the first example is a wholly unacceptable 100%, even the second example, the percentage (55%) of the payment made by the account holder is still considerable and unacceptable. Council Taxpayers would therefore quite rightly be entitled to question how, in these circumstances, the council is permitted to hand over their Council Tax payments to private companies.

The new regulations have left the door open to negotiate contracts. The authority may take advantage of paragraph (1) of Regulation 4 and paragraph (3) of Regulation 13 and contractually require full payment of the "amount outstanding" as it only states that the enforcement agent "MAY" recover from the debtor the fees (Regulation 4) and "MAY" recover the compliance fee (Regulation 13).

"Recovery of fees for enforcement-related services from the debtor

4.—(1) — The enforcement agent may recover from the debtor the fees indicated in the Schedule in accordance with this regulation and regulations 11, 12, 13, 16 and 17, by reference to the stage, or stages, of enforcement for which enforcement-related services have been supplied.
..........

Application of proceeds where less than the amount outstanding

13.—(1).....

(3) Following the payment at paragraph (2), the enforcement agent may then recover the compliance fee.
...."

SECONDLY

The response refers to "payments made by the debtor" and makes no distinction between monies collected by Manchester City Council's Enforcement Agents and monies paid directly to the Council. Presumably the response has been given with no accounting for payments received by the council paid directly from the account holder (no law states that a debtor must deal with a bailiff).

There obviously then becomes an issue when the person owing the money doesn't pay the Council's Enforcement Agent, but pays instead, the Council itself. Presumably then regulation 13 of the Taking Control of Goods (Fees) Regulations 2014 has no validity, and if the council allows its Enforcement Agent to allocate monies pro-rata will be acting unlawfully?

In any event, for Manchester City Council to allow its Enforcement Agent access to resident's council tax accounts would be equally unlawful.

In essence, the purpose of this review is to have Manchester City Council disclose details of measures it has in place that would serve the public interest in that the contractor is paid only when the full amount outstanding is recovered, thereby giving maximum benefit to the public purse.

In order to clarify what was originally requested, it has been re-worded (see below):

"Please provide recorded information the Council holds of any agreements / contracts in place detailing that the Enforcement Agent would be entitled to fees, only in a sum equal to the amount collected over and above the outstanding debt, with the purpose of protecting the council's/taxpayer's interest."

A full history of my FOI request and all correspondence is available on the Internet at this address: https://www.whatdotheyknow.com/request/t...

Yours faithfully,

Paul Smith

Manchester City Council

Dear Mr Smith

Thank you for your email received by the Council on 17th June 2014.

Your request is being dealt with as an internal review in accordance with
the Council’s Access to Information Complaint Procedure. The procedure is
available on the Council's web site at:

http://www.manchester.gov.uk/downloads/d...

A review is being undertaken and we will contact you again in due course.

Yours sincerely

Cath Cryer
Information Compliance Unit
Democratic Services
PO Box 532
Town Hall
Albert Square
Manchester
M60 2LA

Email: [Manchester City Council request email]
Website: www.manchester.gov.uk

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Manchester City Council

Good morning Mr Smith

We are in receipt of your internal review

So that we are able to consider it properly, I would be grateful if you
could give me a ring on the number below so that I can be sure of exactly
what you want.

Regards
Charles Metcalfe
Revenues Manager - Manchester City Council
Alexandra House
Moss Lane East
Manchester
M15 5NX

Internal tel: 800 6382
tel: 0161 219 6382
fax: 0161 274 7214

 

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Dear Manchester City Council,

Sorry I haven't been able to telephone as you requested (I have limited phone access).

I would like the response reviewing with regard to the points raised in my 16 June 2014 email.

The response doesn't make any distinction between payment made directly to the local authority and its enforcement agents.

If payments were made directly to the local authority and its enforcement agent received monies in respect of the compliance fee/pro-rata payments, then either the council would have had to have forwarded this to its bailiff contractor or its contractor would have needed to have access to the Council Taxpayer's account. Both I assume would be unlawful.

There is another point of concern with respect to Manchester City Council stating that it "has no measures in place, as the level of costs and allocation of payments to costs and debt are covered by regulations...". There appears an inconsistency with the Authority in its approach to ensuring maximum benefit to the public purse.

Similarly to regulation 13 of the taking Control of Goods (Fees) Regulations 2014 (but to a greater degree in the bailiff's favour), Regulation 52(4) of the Council Tax (Administration and Enforcement) Regulations 1992 (as applied before 6.4.14) provided for the recovery fees to be discharged before the outstanding sum. However, this didn't prevent councils ensuring contractual arrangements were in place with their bailiffs which only allowed payment on full delivery of the service, thus serving the public interest.

SEE REGULATION 52(4)

"(4) ....any sum recovered thereby which is less than the aggregate of the amount outstanding and such additional costs and charges shall be treated as discharging first the costs and charges, the balance (if any) being applied towards the discharge of the outstanding sum. "

The Council was able to control this with terms and conditions with the old rules, so there is no obvious reason why not with the new. The council presumably puts these contracts out for tender at which point only applicants agreeing terms serving the public interest would be considered; the conditions of contract being that the contractor would only be paid when the full amount outstanding is recovered.

Yours faithfully,

Paul Smith

J.Price, Manchester City Council

1 Attachment

Dear J.Price,

Thank you for your 13 August 2014 response.

You asked if I would bring it to your attention if there was anything missed in the response.

The text quoted below from my request for review doesn't appear to have been considered:

"The response doesn't make any distinction between payment made
directly to the local authority and its enforcement agents.

If payments were made directly to the local authority and its
enforcement agent received monies in respect of the compliance
fee/pro-rata payments, then either the council would have had to
have forwarded this to its bailiff contractor or its contractor
would have needed to have access to the Council Taxpayer's account.
Both I assume would be unlawful."

Yours sincerely,

Paul Smith

Dear J.Price,

Please see my 21 September 2014 email.

Yours sincerely,

Paul Smith