Meeting documents

To be presented by Mr M Strevens, Corporate Finance Business Partner, Mr A Isaacs, Finance Director for CHASC and Mr J Huskinson, Finance Director for CSCL

Mr M Strevens, Corporate Finance Business Partner, Mr J Huskinson, Finance Director for Children’s Services and Mr A Isaacs, Finance Director for Communities, Health and Adult Social Care (CHASC) gave an update to the Committee regarding debt management within their Business Units.

Mr Strevens updated the Committee on the following points:

• The focus on bad debt continued to be raised across the organisation, leading to a significant change in the level of provision for bad debt 
• All Business Units had undertaken a thorough review of their outstanding debt and levels of provision were now based on the outcomes of this exercise
• The default provision figure had reduced between 2015/16 and 2016/17 and the level of provision made had increased in 2016/17 to 59%, which had more than doubled on the previous year
• Significant recovery of debt had been ongoing for a number of years and there was now a funded post for 6 months to focus on debt collection
• The Corporate Management Team had supported the proposal for a central debt management team

The Committee raised and discussed the following points:

• It was noted that the direction of travel for recovering debt was going in the right direction
• Debt that was not recoverable for various reasons including information on the system not being correct and user error as well as the steps that were being taken to ensure that this was mitigated as much as possible
• The  pros and cons of selling debts to third party companies were discussed and it was felt in some areas that this would not be appropriate
• The Committee also discussed the contractual debt vs individual (including small company debts) and Mr Strevens confirmed that it was difficult to segment their customer base
• Ways in which we the Council could check the credit history of those providing or receiving a service were also discussed

The corporate report set out the following recommendation:

Recommendation

That regular updates to the Committee should continue until new processes have fully embedded, especially focussing on the development and future reporting of performance measures.

That the revisions to the Debt Management Strategy be brought back to the Committee in November for comment / review relating to the decision of the Corporate Management Team to implement a central Debt Management Team.

RESOLVED: The Committee AGREED the recommendations

Communities, Health and Adult Social Care

The update provided by Mr Isaacs outlined the process of debt recovery in CHASC and stated that the business unit was looking at different ways to collect debt with lots of improvement work being undertaken.

Mr Isaacs highlighted the following points:

• CHASC currently had £4.5m of outstanding debt, of which £2m was secured on property i.e. where clients were receiving care and were unable to sell their property.  Mr Isaacs stated that this was a low risk debt
• £2m of the unsecured debt was with service users and that this was more difficult to collect/manage
• Last year £0.5m was written off and it may be that further funds would be written off this year
• Mr Isaacs highlighted a positive that there was an increase in those paying by direct debit
• There was also a review of internal processes taking place and working with Harrow Legal
• The Committee requested regular updates at future meetings

ACTION: Ms Gibb

RESOLVED: The Committee NOTED the report

Children’s

Mr Huskinson presented the update to Committee.

Recommendation

That the Committee note the good progress in addressing historic debts, recovering much of the monies due and the work to improve processes in future.

Mr Huskinson highlighted the following points:

• Children Services had relatively limited income compared to budgets owing to the nature of the statutory services provided and the (young) ages of the service users affected
• The type of debt mostly related to contributions  by other parties i.e. section 106 developers
• A big exercise took place last year to recover outstanding debt, some debt was also written off

Mr Huskinson highlighted the largest debt owing as monies owed by a provider of a number of services on behalf of the Council and had been incorrectly charging the Council for these services, having already received payment for them from other funding sources. This had resulted in an overcharge of £264k and had now been escalated to their Chief Executive.  The Committee discussed why no legal action had been taken, requested that Mr Huskinson liaise with Legal colleagues immediately and report back to this committee the detailed history of this debt and what actions are now being taken to recover it.

ACTION: Mr Huskinson

The Committee asked that they receive an update on the outstanding debt when Mr Strevens comes back to the Committee in November.

ACTION: Mr Strevens

RESOLVED: The Committee NOTED the report