Agenda item

Procurement for the Provision of Enforcement Agent Services

Report of the Executive Director of Corporate Resources and Customer Services

Minutes:

The Cabinet considered the report of the Executive Director of Corporate Resources and Customer Services that advised that the Council had, for many years, used the services of external enforcement agent companies as a last resort to recover various debts it was owed, such as for Council Tax, Business Rates, Housing Benefit overpayments, Sundry Debts and other income from fees and charges including penalty charge notices for parking fines. The report also advised that most people paid the Council on time, but some simply tried to delay payment. However, the Council recognised that people and businesses in the community were facing challenges in the current economic climate, particularly in the light of rises in the cost of living, post COVID economic recovery and the Government’s welfare reform changes; and that to help mitigate these issues support procedures remained under constant review within the debt collection process.

 

The report continued that before a debt was passed to an enforcement agent company to collect, the Council attempted to engage with the debtor to offer help and assistance at each stage in the collection and recovery process and, where possible, supported them to make affordable arrangements based on their individual circumstances together with providing information about voluntary sector or business advice organisations that could give further practical support with debt and welfare advice. Regrettably for some, the refusal to engage or to seek independent advice could leave the Council with limited alternatives and sometimes it became necessary to pass the debt to an enforcement agent company to enforce a Liability Order which had been obtained from the Magistrates Courts.

 

The Council complied with all relevant Government legislation that governed the collection of debt and applied best practice to Council Tax debt collection, as recommended by the Local Government Association; and the Council worked in partnership with Sefton Citizens’ Advice and contracted enforcement agents to ensure that people with Council Tax arrears were treated fairly.

 

The report concluded that the Council’s existing contract which was entered into under the Rotherham Enforcement and Debt Collection Services Framework was due to expire on the 31 March 2023.; and that therefore, to ensure enforcement action could continue a procurement process for enforcement agent services was required. The report sought approval to commence a mini competition under the YPO Enforcement Agency Services Framework 953.

 

Decision Made:

 

That:

 

(1)

the procurement process of a mini competition under the YPO Enforcement Agency Services Framework 953 be approved;

 

(2)

the decision on which enforcement agent companies to

award contracts to be delegated to the Executive Director of Corporate Resources and Customer Services in consultation with the Cabinet Member - Regulatory, Compliance and      Corporate Services;

 

(3)

approval be granted for contracts to be drawn up for a period of three years with effect from 1st April 2023, with the option to extend for one further year; and

 

(4)

the preferred Lots as detailed below be noted:

 

·       Lot 1 – Enforcement Agent contracts for Parking Fines. This will include recycled cases (Phase 2). A maximum of three suppliers to be appointed.

 

·       Lot 2 - Enforcement Agent contracts for Council Tax and Business Rates Collection. This will include recycled cases (Phase 2). A maximum of three suppliers to be appointed. This Lot will also include collection of debt for the Southport Town Centre Business Improvement District.

 

·       Lot 3 – Debt Collection Services for Sundry Income, Housing Benefit Overpayments and Council Tax and Business Rates debts that have proved uncollectable by other means. This will be a separate Lot from the enforcement agents although suppliers may come from the same companies. A maximum of three suppliers to be appointed with a commission rate expected on collections. A zero commission was paid during the current contract.

 

Reasons for the Decision:

 

The YPO Enforcement Agency Services Framework 953 has been reviewed and assessed by the Procurement Team as the most suitable framework for this exercise and is fully compliant with the Public Contract Regulations 2015.

 

Existing contracts will expire on 31 March 2023. Enforcement agents are a vital additional resource for the collection of unpaid debt due to the Council. The amount collected on behalf of the Council between 1 April 2019 to 31 May 2022 was £4,407,112.93.

 

The contract period recommended is consistent with previous contracts, allows time for officers and new suppliers to establish efficient working arrangements, and for performance to be monitored effectively. Due to the nature of the debts being collected performance can only be effectively measured in years rather than weeks or months.

 

The total value of fees collected by enforcement agents in the same period was £1,520,520,63. Although the fees are statutory amounts paid directly to the enforcement agents by debtors, for procurement purposes the value of fees collected is considered to be the value of the contract.

 

The debt collection suppliers appointed on the current contract also provide enforcement agent services. It is considered that a zero commission does not provide sufficient incentive to maximise collections whereas the suppliers receive statutory fees on Council Tax, Business Rates and Parking Fine collections. It is considered that by separating the debt collection into a separate Lot, alternative suppliers that specialise in debt collection may bid for that element. This may in turn present opportunities to explore alternative debt collection options for Council Tax debt, in particular old debt that may otherwise be written off.

 

Alternative Options Considered and Rejected:

 

(1)

The option of not appointing a contractor was considered but dismissed. This was because the authority cannot risk not collecting a sizeable percentage of its annual income without the support of enforcement agents.

 

(2)

The Council could conduct a compliant procurement exercise, approaching the whole market directly. This option however would require a longer timescale as the tender opportunity would need to be advertised on the UK's e-notification service, Find a Tender (FTS). Further, the volume of bids submitted is unpredictable and so in addition to managing a longer advertising period, officers could easily find that evaluation of bids also takes a much longer period. This could prove problematic as the existing contracts expire on 31 March 2023 and would be an inefficient use of the Council’s resources. Therefore, this option has been rejected.

 

(3)

Contracts can also be awarded under a concession agreement with direct awards to successful bidders. However, there is a limit to the value of the contracts that can be awarded as a concession based on the value over the lifetime of the contracts. It has been assessed that the potential value of the contracts would exceed the FTS threshold. A tender process would still be required by way of advertisement via FTS that would open the process to unlimited competition and would be inefficient use of Council’s resources. This is also likely to extend the timescale to procure services which could negatively impact on the collections process.

 

 

 

Supporting documents: