Removal of prison sentences for council tax debts could see Flintshire lose out on £1.8m

The removal of prison sentences for people who fail to pay their council tax could see Flintshire Council miss out on as much as £1.8 million a year, senior figures have warned.

The Welsh Government brought a halt to the ability for councils to apply to magistrates to determine whether a taxpayer is guilty of ‘wilful refusal’ in April.

It came after the jail sentences handed out in some committal cases in Wales were found to be outdated and disproportionate by ministers.

But backbench councillors in Flintshire, which is currently the best performer in the country in terms of the percentage of council tax it collects, were told it could hinder the ability to punish people who have the means to pay, but choose not to.

Speaking at a meeting held at County Hall in Mold today, chief executive Colin Everett said: “We spoke against this issue because our evidence shows that there are very small minority of people who are able to pay, but who evaded payment purposefully.

“It’s not people in need, it’s people who evade the system.

“We’ve got ample evidence and the removal of committal actually takes away an appropriate route and perhaps change people’s attitudes.

“There’s some subtle reminders here that the funds might deteriorate because of circumstances beyond our control.”

Flintshire Council currently tops the table after it collected the highest percentage of council tax of the 22 authorities in Wales.

In the last financial year it brought in £83.7m out of a possible total of £85.3m, which equates to 98.2 per cent.

After factoring in £80,000 of debt that had to be written off, £1.4m worth of arrears were owed at the end of March.

Officers said the council had taken a positive approach to working with people who cannot afford to pay by referring them to discount and exemption schemes, as well as allowing them to extend payments over 12 months.

However, in a report to members of the corporate resources committee, they said the removal of prison sentences could have a damaging impact on its cashflow.

Comparing what would happen if collections dropped to the same level as Scotland, where such sentences have already been removed, Gareth Owens, chief officer for governance, said: “The financial implications for the council are significant.

“If, for example, Flintshire’s 98.23 per cent ‘in-year’ collection level fell to the Welsh average of 97.4 per cent, the loss of income would be £700,000.

“If Flintshire’s collection levels fell to the 96 per cent Scottish average (i.e. a reduction of 2.2 per cent), the loss of income would be £1.8m.

“The key risks centre around ensuring maintaining cash-flow and maintaining collection levels and current working practices and recovery processes currently ensure this is consistently achieved.”

Flintshire’s collection total was achieved despite the authority increasing council tax by 6.7 per cent for the financial year.

When the move away from prison sentences was announced last year, First Minister Mark Drakeford said those who are unable to pay should be treated fairly and with dignity.

Speaking in his former role as Finance Secretary, he added he would consider new measures to deal with people refusing to pay.

But Flintshire councillors also voiced concerns at the removal of the enforcement measure.

Buckley’s Richard Jones said: “The write off level is something beyond our control and I know this committal situation is not going to assist in that.

“Perhaps we should try and make our point in terms of why we think it’s important.

“It could impact our cashflow and while it’s not a massive amount of money, it’s something we should voice our opinion against.”

By Liam Randall – Local Democracy Reporter (more here).