17th February 2014 Cabinet Report (Agenda Item 6 – Review of Council Tax court costs)

Enid Brighton made this Freedom of Information request to North East Lincolnshire Council This request has been closed to new correspondence. Contact us if you think it should be reopened.

The request was refused by North East Lincolnshire Council.

Dear North East Lincolnshire Council,

I have provided a link to a relevant document for your reference:

CABINET – 17th February 2014

(6. Review of Council Tax court costs.pdf)

http://www.nelincs.gov.uk/committees/Fun...

After what is presumed the combination of pressure from a legal challenge to the reasonableness of costs and the effects of the benefit reforms introduced in April 2013, the billing authority proposed that it reduce the summons costs. A report (Review of Council Tax court costs 17 February 2014) seemed to imply that the increased volume of court applications since April 2013 would put the authority at risk of exceeding expenditure with the additional income generated if the standard costs were not lowered. The report briefly outlined the risks of members opting either to levy a higher level of court costs than recommended or a lower level. It implied that the costs raised through the court application should cover all the additional costs incurred by the Council due to late or non-payment.

“Members may choose to levy a lower level of costs than that recommended, however, this would mean that additional costs incurred by the Council due to non-payment are borne by those Council Tax payers who pay on time in accordance with their instalment plan.

A higher level of costs would leave the council open to legal challenge over the reasonableness of its’ charges under the Council Tax (Administration & Enforcement) Regulations.”

The court is being made use of to recover all administration expenditure through liability order applications, even though the law does not extend to such provision. Mindful that applying for court orders is discretional, there is scope to minimise recovery work which can not lawfully be re-charged to the defendant through court costs. Administration could therefore be significantly reduced by curtailing the over enthusiastic use of the courts in unnecessary cases, for example, where there is unlikely to be a long term delay in payment.

Notwithstanding that the law makes no provision to recover all administration expenditure, it is normal within the way council services are provided that all residents, regardless of whether they benefit from a service, must nevertheless pay towards it. It therefore can not be justifiably argued that because the taxpayer as a whole might bear some cost of collection that the law be creatively interpreted so they don’t.

A variety of administration activities are carried out within the Revenues & Benefits section. The Service is primarily responsible for Council Tax and Business Rates Billing, administering Housing Benefit and processing Council Tax Benefit Claims. Various other sections providing support make up the service including Customer Service teams, System Support/IT etc.

Employees are also required in an investigatory capacity, for example in Benefits, staff engage in the control and recovery of Housing Benefit Overpayments or where appropriate investigate and prosecute Benefit fraud. The Recovery Section sends out reminders, summonses and deal with court applications for late payers. Staff will be required to deal with account queries and where appropriate engage with debtors for re-scheduling and monitoring payment plans.

Further recovery expenditure is incurred by the council in respect of those persons against whom liability orders are made. Staff engage in activities ranging from notifying the debtor of possible further action to applying to the court for commitment to prison. Information must be obtained about the debtor’s circumstances in order to assess whether accounts are more suitable for attachments of earnings, deduction from benefits or referral to bailiffs.

Where those measures fail to obtain payment then staff might engage in further recovery work, for example applying to the court for charging orders or instigating bankruptcy. Similarly to pre court action arrangements, terms of mutually acceptable payment plans might simply be agreed, albeit still requiring resources to correspond with debtors, re-schedule instalments and then monitor accounts until settled. For all stages, staff must be available for dealing with queries whether by telephone or written correspondence.

Clearly the additional expenditure incurred by the Council due to non-payment far exceeds that which the law provides may be applied for against defendants in respect of costs incurred by the council in court applications. However, NELC has set its standard summons costs at a level which ensures that the Council Tax payer as a whole pays none of these additional costs. There is because of this, the council’s erroneous belief that the law is being complied with and would be legally at risk, only if levying a higher level of costs.

The costs are based on a broad estimate of overall recovery expenditure which disregards the law that provides only for recharging court application costs incurred, and further provides where debt is settled prior to the hearing, only summons costs may be sought.

Failure in recognising the regulation’s further provision that a lesser amount than the overall costs incurred are sought in respect of the summons is admitted under the report’s Risk Assessment.

“Failure to review the appropriate level of costs levied leaves the council at risk of levying costs which exceed the overall costs of making applications for Liability Orders. This could contravene government regulations and leave the council at risk of challenge.”

However, it is recognised from the above – together with the report earlier stating that it ‘has a duty to ensure that the level of costs does not exceed reasonable costs incurred in obtaining a liability order’ – that this does not extend to ‘additional costs incurred by the Council due to non-payment’.

NELC’s commitment to ensuring no element of recovery administration costs is borne by the ratepayer as a whole appears to be the ends for which disregarding the law is justified. This might be defended based on the idea that if everyone paid their Council Tax on time there would be no recovery costs.

If so argued it would highlight inconsistencies in the way services are funded. It would serve the same logic for an authority to state that if nobody owned motor vehicles there would be no public cost for road repairs. To that end, non-drivers should not have to subsidise additional costs incurred by the Council for those causing wear and tear to the roads. Therefore, in order for there to be consistency, the authority would need to ensure that no public services are funded from Council Tax of any ratepayer not using or benefiting from them.

It would require radical changes in the way public services are delivered to achieve consistent funding so that only services which a ratepayer uses or benefits from are financed through his Council Tax. For the foreseeable future, it remains that expenditure, however tenuously linked with recovery, is covered exclusively by ratepayers using that facility but another service, a public library to quote an alternative example, is funded by all taxpayers whether they use it or not.

Request for information

Clearly as I have set out above, the basis on which council tax court costs were presented in the report was unlawful.

Please provide all recorded information, for example background papers with emphasis on the Legal Services / Monitoring Officer's involvement leading to the Cabinet being satisfied that the basis on which council tax court costs were presented in the report was lawful.

Yours faithfully,

Enid Brighton

PPD - FOI, North East Lincolnshire Council

Dear Ms Brighton,

 

I am pleased to acknowledge your request for information, which has been
allocated the reference number 9399_1415.

Your request has been passed to the relevant department for processing and
you can expect your response within the 20 working day limit. If it will
take us longer than 20 working days to respond to you, we will inform you
of this and provide you with the expected date for receiving a response.

Further information about how we will deal with your Freedom of
Information requests is available on our website at:
[1]http://www.nelincs.gov.uk/council/the-co....

Please feel free to contact me if you require any further information or
assistance quoting the reference number above.

 

Yours sincerely on behalf of North East Lincolnshire Council

 

Feedback Officer

 

Resources Directorate

 

 

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PPD - FOI, North East Lincolnshire Council

Dear Ms Brighton

 

Thank you for your information request 9399_1415, which asked in relation
to the Cabinet report of 17th February 2014 concerning the review of
Council Tax court costs ‘Please provide all recorded information, for
example background papers with emphasis on the Legal Services / Monitoring
Officer's involvement leading to the Cabinet being satisfied that the
basis on which council tax court costs were presented in the report was
lawful.’

 

I wish to confirm that North East Lincolnshire Council holds the
information you have requested.

 

The Cabinet Report you refer to dated February 17^th 2014, sets out the
Council’s position concerning the review of court costs levied to
residents who have failed to pay Council Tax in accordance with requested
instalments. The report includes section 5 LEGAL IMPLICATIONS, which sets
from the Legal service the legal implications with regard to the report
recommendations. The report is available on our website at

 

[1]http://www.nelincs.gov.uk/committees/com...

 

Appendix A of the report includes, a breakdown of how the summons cost was
calculated, which is also available on our website at

 

[2]http://www.nelincs.gov.uk/resident/counc...

 

This is all the information held by North East Lincolnshire Council.

 

If you believe that your request for information has not been handled in
accordance with the Freedom of Information Act, you have the right to
request an internal review by the Council. Please be clear about which
elements of the Council’s response or handling of the request you are
unhappy with, and would like the Council to address during the internal
review process.  If following this you are still dissatisfied you may
contact the Office of the Information Commissioner. If you wish to request
an internal review, please contact me and I will make the necessary
arrangements.

 

Yours sincerely on behalf of North East Lincolnshire Council

 

Feedback Officer

Resources Directorate

 

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Dear PPD - FOI,

NELC must now be aware that the basis upon which it determines summons costs is unlawful, but as a consequence of highlighting this there may be a positive aspect. The legal department now have some relevant material to look again at the way it applies the law regarding summons costs in Council Tax court applications and would appreciate being informed of any plans NELC has to review this.

Yours sincerely,

Enid Brighton

PPD - FOI, North East Lincolnshire Council

Dear Ms Brighton

 

Thank you for your follow up information request, reference number
9399_1415.

 

I can confirm that North East Lincolnshire Council holds no recorded
information in relation to any plans to formally review the way it applies
the law in relation to summons costs.

 

If you believe that your request for information has not been handled in
accordance with the Freedom of Information Act, you have the right to
request an internal review by the Council. Please be clear about which
elements of the Council’s response or handling of the request you are
unhappy with, and would like the Council to address during the internal
review process.  If following this you are still dissatisfied you may
contact the Office of the Information Commissioner. If you wish to request
an internal review, please contact me and I will make the necessary
arrangements.

 

Yours sincerely on behalf of North East Lincolnshire Council

 

Feedback Officer

Resources Directorate

 

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Dear PPD - FOI,

Your most recent response indicates that NELC has misunderstood my question which was not for recorded information.

I was asking to be informed of any plans NELC had for reviewing the way it claimed Magistrates' court costs, in light of the council's ignorance (but now not) of what in fact the law provides.

Evidently NELC's ignorance has led to hundreds of thousands of residents wrongly incurring court costs and assume now the council would want to put things right.

Yours sincerely,

Enid Brighton

Dear PPD - FOI,

Please see the High Court Judgment in the link below where it was held that a Council Tax Liability Order in relation to Haringey Borough Council was unlawful.

http://www.bailii.org/ew/cases/EWHC/Admi...

Paragraphs 34 and 35 of the Judgment agrees with analysis in the link provided below highlighting that those councils analysed consider entitlement (unlawfully) in a claim of their costs.

https://www.scribd.com/doc/262650108/Con...

(paras 152-161 ANNEX A)

"34. As a matter of straightforward construction of Regulation 34(7) that means that the Magistrates must be satisfied:

i) that the local authority has actually incurred those costs;

ii) that the costs in question were incurred in obtaining the liability order; and

iii) that it was reasonable for the local authority to incur them.

35. It is clear that there must be a sufficient link between the costs in question and the process of obtaining the liability order. It would obviously be impermissible (for example) to include in the costs claimed any element referable to the costs of executing the order after it was obtained, or to the overall administration of council tax in the area concerned."

Given that the High Court has plainly identified that expenditure claimed in such circumstances as are claimed by North East Lincolnshire Council are obviously impermissible, I would like assurance that the council's legal department will be exploring the legality of the way it conducts these proceedings.

Yours sincerely,

Enid Brighton

Dear PPD - FOI,

Please confirm receipt of the email sent 7 May 2015.

Yours sincerely,

Enid Brighton

PPD - FOI, North East Lincolnshire Council

Dear Ms Brighton

I can confirm that an email was received on 7th May 2015. This email did not ask for any recorded information held by North East Lincolnshire Council and therefore no response has been or will be provided.

We politely request that the [email address] email address is only used for valid requests for recorded information held by North East Lincolnshire Council. It should not be used for making comments, or raising other matters, not relevant to the Freedom of Information process. Any such future correspondence will not be acknowledged or responded to.

Yours sincerely on behalf of North East Lincolnshire Council

Ian Hollingsworth

Information Governance and Complaints

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Dear PPD - FOI,

As it has been adjudged that the way in which North East Lincolnshire Council estimates its council tax court summons costs is non-compliant with the law, will it please provide all, if any, recorded information regarding the impact the case in the link below is having on its recovery through the Magistrates' court, particularly any steps taken or planned to revise the summons costs calculation.

http://www.bailii.org/ew/cases/EWHC/Admi...

Yours sincerely,

Enid Brighton

PPD - FOI, North East Lincolnshire Council

Dear Ms Brighton

 

Further to your information request below which has been allocated
reference number 0113_1415 I can confirm that North East Lincolnshire
Council holds no recorded information in relation to your request.

 

North East Lincolnshire Council holds no recorded information in relation
to the linked case having an impact on its recovery through the
Magistrate's court. In addition we are not aware of any judgement
regarding North East Lincolnshire Council's estimation of Council Tax and
court summons being non-compliant with the law.

 

I can confirm that the calculation is reviewed annually to ensure it
accurately reflects any changes, either local or national, which may
impact on the calculation. I am also pleased to confirm that in-line with
best practice North East Lincolnshire Council publishes the cost
calculations online at the following address:

 

[1]http://www.nelincs.gov.uk/resident/counc...

 

If you believe that your request for information has not been handled in
accordance with the Freedom of Information Act, you have the right to
request an internal review by the Council. Please be clear about which
elements of the Council’s response or handling of the request you are
unhappy with, and would like the Council to address during the internal
review process.  If following this you are still dissatisfied you may
contact the Office of the Information Commissioner. If you wish to request
an internal review, please contact me and I will make the necessary
arrangements.

 

Yours sincerely on behalf of North East Lincolnshire Council

 

Feedback Officer

 

Resources Directorate

 

 

 

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Dear PPD - FOI,

I don't think you know how the court system works in regards a ruling setting presidents. The judgment does not only impact on Haringey Borough Council, it impacts on all billing authorities (of which NELC is one) in England (and despite the introduction of a cap on costs in Wales) and Wales.

NELC is aware of the judgment in the Haringey case therefore aware also that NELC's estimation of Council Tax court summons costs is non-compliant with the law.

Yours sincerely,

Enid Brighton

ivanataylor left an annotation ()

Council Tax ex councillor questions Town and District Council

I would like to know if a complaint is actually laid before the Magistrates prior to a summons being issued by the Magistrates for non payment of Council tax?

https://www.youtube.com/watch?v=qw4I2gEt...

Enid Brighton (Account suspended) left an annotation ()

I wonder if North East Lincolnshire Council is aware of this letter which has apparently been sent to Grimsby Magistrates court.

https://www.scribd.com/doc/295501184/NEL...