PEERS PASS AMENDMENT TO CURB BAILIFFS - GOVERNMENT IRRITATED
PEERS PASS AMENDMENT TO CURB BAILIFFS -
An amendment, initiated by CAB and supported by Zacchaeus 2000, to the Crime and Courts Bill was tabled by Baroness Meacher in the House of Lords on the 18th December. iT will amend the Legal Services Act 2007 to extend the Legal Ombudsman’s compulsory Alternative Disputes Resolution jurisdiction to all Bailiffs.
It was passed by Peers 233 for and 191 against. it will now return to the House of Commons some time after they get back from the Christmas break on the 7th January ---- where it will be rejected by the Government.
The government's reply is that they are about to produce bailiff regulations and the amendment was unnecessary. But the new Secretary of State for Justice is ideologically opposed the the regulation of the private sector and the vast majority bailiffs are employed by private companies contracted to the courts and local authorities. So I am not expecting anything as good as the free service provided by the legal ombudsman.
Bringing the bailiffs under control is now urgent because council tax arrears and arrears for fines for not paying TV licences are inevitably going to increase because of the imposition of council tax by local authorities on benefits which have already been capped and cut by the DWP and due to be capped some more.
I have sent the following brief from Z2K to all MPs. If you can find the time over the Christmas and New Year break it would be good if you can give them a nudge!!
CRIME AND COURTS BILL AND THE BAILIFFS
This amendment would give debtors and the advice sector, through the alternative disputes resolution procedure, a remedy when the bailiffs do not comply with the National Standards for Enforcement Agents issued by the Ministry of Justice. It is currently toothless and often disregarded.
- The enforcement of council tax arrears, and other debts, against vulnerable and impoverished individuals and families is now and often attempted and then pursued against incomes which are not far short of destitution.
- That is the situation now and it will be made very much worse by the deficit reduction policy, the caps and the cumulative impact of the 2010 Housing Benefit regulations, the caps and cuts of the Welfare Reform Act 2012 and by the Local Government Finance Bill 2012 which will result inadequate benefits needed for food, fuel, clothes, transport and other necessities being taxed with 20% of the council tax from April 2013; in increase in arrears and bailiff action is inevitable.
- ·The abolition of legal aid for issues such as welfare benefits, debt, most housing problems makes it essential that the government bites the bullet of cost associated with this amendment and provides vulnerable and impoverished debtors with a remedy against aggressive and careless bailiffs who tend to put the collection of their fees before the humane treatment of the destitute defaulters.
Zacchaeus 2000 was registered as a charity in 1997. We only work with debtors entangled in the benefit system; we do not normally work with mortgage or credit card arrears. We help over 650 impoverished debtors a year in London; the cases are often time consuming.
We take a very serious view about the relationship between debt and mental illness and also between poverty/destitution, poor maternal nutrition, low birth weight and, consequently, babies with life time mental and physical illness.
Baroness Meacher is hosting for Zacchaeus 2000 a launch of two reports about debt and mental illness by the Royal College of Psychiatrists and the University of Brighton at the House of Lords on the 23rd January called.
PERSONAL DEBT AND MENTAL HEALTH
“Are UK creditors, jobcentres and local authorities making the public ill? Should money lenders and enforcement agents have a statutory public health responsibility?”
Formal invitations will be posted after Christmas.
THE CURRENT CIRCUMSTANCES – FOCUS ON COUNCIL TAX ARREARS
I will first explain what currently happens to impoverished and vulnerable council tax defaulters and then show how very much worse it will be as a result of welfare reform and the deficit reduction policy.
I will focus on the council tax procedure, rather than fines or other debts, even though we are equally concerned about the enforcement of fines for non-payment of TV licences and other minor offences.
Council tax arrears will increase substantially from April 2013 because the inadequate benefits of claimants needed for food, fuel, clothes, transport and other necessities will be taxed with 20% of the council tax.
The background is as follows.
The advice sector, creditors and the bailiff companies have been discussing the regulation of bailiffs with the Ministry of Justice for around 12 years. I have been a member of the Enforcement Law Reform Group comprising all three sectors for about eight of those years.
Zacchaeus 2000 meets bailiffs when they are enforcing council tax and fines against vulnerable and impoverished debtors. The private bailiff companies are contracted by the local authorities, creditors and the magistrates courts.
The kind of case we would refer to an ombudsman is when the bailiffs fail to comply with the with the National Standards for Enforcement agents; in particular Page 9 which requires bailiffs to return cases of vulnerable and impoverished council tax defaulters from their doorsteps back to the council for reconsideration of their case rather than persist in enforcing the arrears, court costs and their fees, which can add over £400 to those arrears, against incomes which are sometimes close to destitution.
“Enforcement agents/agencies and creditors must recognise that they each have a role in ensuring that the vulnerable and socially excluded are protected and that the recovery process includes procedures agreed between the agent/agency and creditor about how such situations should be dealt with. The appropriate use of discretion is essential in every case and no amount of guidance could cover every situation, therefore the agent has a duty to contact the creditor and report the circumstances in situations where there is evidence of a potential cause for concern. If necessary, the enforcement agent will advise the creditor if further action is appropriate. The exercise of appropriate discretion is needed, not only to protect the debtor, but also the enforcement agent who should avoid taking action which could lead to accusations of inappropriate behaviour.
Enforcement agents must withdraw from domestic premises if the only person present is, or appears to be, under the age of 18; they can ask when the debtor will be home - if appropriate.
Enforcement agents must withdraw without making enquiries if the only persons present are children who appear to be under the age of 12.
Wherever possible, enforcement agents should have arrangements in place for rapidly accessing translation services when these are needed, and provide on request information in large print or in Braille for debtors with impaired sight.
Those who might be potentially vulnerable include: the elderly, people with a disability; the seriously ill; the recently bereaved;
single parent families; pregnant women; unemployed people; and,
those who have obvious difficulty in understanding, speaking or reading English.
This is merely guidance so it has no teeth. We cannot currently take bailiffs or their companies to task when they ignore it.
COUNCIL TAX ARREARS
Council tax arrears currently occur for a number of reasons.
INCOME IS LOW AND THERE ARE OTHER DEBTS. Most people receiving unemployment benefits currently receive 100% council tax benefit and 100% housing benefit which pays all the rent. That leaves the Income Support/Jobseeker allowance available to pay for food, fuel, clothes, transport and other necessities. That is currently £258 a week for an unemployed couple with two children or £71 a week for adults aged 25 – 60.
Despite much governmental publicity to the contrary unemployment benefits are by no means generous. The adult unemployment benefit is half the 60% of the median official poverty threshold and even further below the Joseph Rowntree Foundation minimum income standards. The family benefits are below the 60% median income measure and further below the JRF minimum income standard.
Lower pay is resulting in many more people in work applying for housing benefit. The Building and Social Housing Foundation reports that more than 90 per cent of new housing benefit claims over the past two years have been made by employed people, as squeezed workers seek help with their living costs.
INSECURE EMPLOYMENT. When benefit claimants, vulnerable or not, achieve insecure employment, or are contractors, they are moving in and out of low pay, like cleaners; their low pay in work takes them above the benefit threshold and they fall into council tax arrears while in work; when they return to unemployment those arrears have to be paid out of the inadequate benefit income needed for food, fuel, clothes, transport and other necessities.
We work with ATD Fourth World who are close to the poorest people in London. They asked for our help with “Sarah” a 51 year old who is single, unemployed, semi-literate and in debt to Lambeth Council.
Her Doctor tells us “she has learning difficulties and is illiterate and for many years has had chronic anxiety with episodes of panic. Were the Bailiffs to proceed with the seizure of her goods, the effect would be catastrophic for her and would seriously compromise her health”.
She received £53.05 a week income (now £71 but lower in value due to inadequate annual uprating). She pays £4.13 a week water rate, £2.50 rent arrears and has £36.42 to buy everything but rent and council tax. Capita Business Services in Bromley collect council tax for the Council. She owes £468 from a failed attempt at low paid work. The failure caused the debt.
Equita Bailiffs in Northampton whose computers, blind to her ill health, illiteracy and poverty, threaten “We have arranged for our bailiff to call at your home this weekend to seize your goods and transport them to the auction rooms for sale”, and two days later “NOTICE PRIOR TO COMMITTAL TO PRISON PROCEEDINGS”.
I visited her home; she had nothing of value to seize. We tell Lambeth Council who call off the bailiffs. The computer still runs. Another threat to sell the furniture storms its way from Northampton to Lambeth.
To relieve her anxiety Zacchaeus promises to pay the £468 council tax arrears should the magistrates be minded to imprison her rather than write off the debt. We also promise to go to court with her. Lambeth backed off. “
OFFICIALS OF JOBCENTRES AND LOCAL AUTHORITIES MAKE MISTAKES. Another reason for council tax arrears is that Local authorities and jobcentres officials make mistakes; If the jobcentre decides that a person is eligible for income support payments then they qualify for 100% housing and council tax benefit. If the jobcentre then accidentally cancels the income support then the computers cancel the 100% council tax benefit creating arrears which the claimants can know nothing about until the letter arrives telling summoning them to court for a liability order hearing which can add up to £120 to the arrears or the bailiffs turns up on the doorstep demanding instant payment of an impossible sum.
LACK OF ATTENTION TO THE WEDNESBURY PRINCIPLES. At the heart of administrative law is the requirement on all government officials to ascertain the relevant facts, disregard irrelevant facts and be rational, the so called Wednesbury Principles ( see Associated Provincial Picture Houses Ltd. v Wednesbury Corporation  1 KB 223), in other words to be reasonable. Too often due to over work, shortage of staff or ignorance of the principles, officials of local authorities will despatch the bailiffs to households without due regard to the facts of the case and so to people who will not be able to pay off the council tax arrears.
CLAIMANTS MAKE HONEST MISTAKES. Failing to inform the local authority of a change in circumstances on time, or forgetting altogether, can result in arrears of council tax, or an overpayment which has to be paid off.
A FAILURE IN COMMUNCATIONS. Another complicating factor is the reliance of the people served by Zacchaeus 2000 on their pay-as-you-go mobile. BT has cut off over 1 million landlines. Mobiles run out of money when the family or individual does; or because they have to hang on so long to get a reply from the local authority or the bailiffs company.
AFTER WELFARE REFORM.
After welfare reform council tax arrears are inevitable in their millions. I am not exaggerating. The situation facing benefit claimants following welfare reform is desperately serious for the following reasons.
· The move of uprating from RPI to CPI has slowed down the rate of increase of those already inadequate benefits of £258 a week and £71 a week which are intended to pay for food, fuel, clothes, transport and other necessities.
· From April 2013 very many councils will charging 20% of the council tax against the £258 and the £71 benefits needed for food, fuel, clothes and transport.
· In very many cases that £258 and that £71 alloed in the benefit system for food, fuel clothes and transport will already be paying that part of the rent which is not now covered by the housing benefit since it has been capped due to the changed housing benefit regulations in October 2010. In October 2013 there will be an overall benefit cap limiting the £258 + housing benefit and council tax benefit to £500 a family or individual; this is going to hit large families with high rent and then 20% of the council tax very hard indeed with more rent arrears and council tax arrears they are unable to pay due to the Welfare Reform Act 2012.
See Appendix C of Haringey Council’s minutes of the 10th July 2012 which will be repeated for every council charging 20% of the council tax against benefits, or some other amount. http://www.minutes.haringey.gov.uk/mgConvert2PDF.aspx?ID=26910
· It is primarily the responsibility of councils to enforce council tax so it is their responsibility to ensure that vulnerable and impoverished defaulters are not put through the misery of being forced into destitution and the humiliation of the food banks by ensuring the bailiffs return these case for reconsideration after robust consideration of the facts and circumstances of each case.
· Councils will, through no fault of their own, have to write off millions of council tax because so many benefit claimants will not be able to pay because they will be hit by the cumulative impact of the reforms. Councils have the power to remit council tax and the courts have the power to remit fines; this merciful power will have to come into use more and more as from April 2013.
Finally the abolition of legal aid for issues such as welfare benefits, debt, most housing problems makes it essential that the government bites the bullet of cost associated with this amendment and provides vulnerable and impoverished debtors with a remedy against aggressive and careless bailiffs putting the collection of their before the humane treatment of the destitute defaulter.
Rev Paul Nicolson
Chair, Zacchaeus 2000 Trust
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