Authority justifies its council tax collection methods

Andrew Ratchford
Andrew Ratchford

WIGAN Council has sought to assure residents its methods for collecting council tax and punishing those who do not pay is strictly above board.

The local authority has taken the unusual step of publishing in great detail the way it deals with the tax following a string of criticisms by campaigners.

Wigan Council charges anyone who is summonsed to court for non-payment of council tax £65, saying this is the lowest amount charged of any of Greater Manchester’s 10 authorities.

The town hall has also explained exactly how it calculates the £1,619,257 which is the total expense associate with each year’s hearings and vigorously defended the amount, saying it falls under the heading of “reasonably incurred costs” which councils are permitted to charge back to those hauled up before the magistrates.

These disclosures follow a lengthy campaign by transparency and democracy campaigners in the borough who have questioned whether the Council Tax Administration and Enforcement Regulations are followed when liability orders are being issued and whether the costs charged are fair.

The council has also receiving enquiries about its status as the billing authority for council tax, which is listed as Wigan Borough Council despite the authority usually using the name Wigan Council.

Ince campaigner Andrew Ratchford said: “The council is only allowed to claim for costs involved in issuing the summons. They cannot claim for costs of reminders, monitoring or anything else, only the cost of issuing the summons.

“They are also charging per hearing. This is deceitful as you can have 1,200 people being issued summonses at the same hearing at the same time.

“The cost claimed is also based on the assumption of what it will cost. If the assumption is wrong and the actual cost is £25, does that mean the council issues everyone a refund of £40?”

However, the council has now responded to the criticism and strenuously denied any wrong-doing.

The costs released by Wigan Council, which are from September 2015, show the total staffing costs for processing council tax non-payment comes to £1,545,337.

Staff spent 40 per cent of their annual time monitoring reminders, arrangements and correspondence at a cost of £876,097 and also spent two days each year on pre-list selection and checking of cases as well as producing and issuing summons.

Each year 44 days are spent on summons arrangements, 11 days on the hearings list and liability orders and six days sitting in court.

Other costs incurred included £48,000 spent on stationary and £13,680 each on first and second-class postage.

The costs assume there will be 20 hearings at the magistrates’ court in the course of a year and 24,000 summons eswill be given out to Wiganers in 12 months.

The local authority acknowledged ensuring the tax is paid on time is becoming more costly and time-consuming, with the number of cases going up rapidly, which the town hall attributes to the impact of welfare reform on people’s ability to pay.

Wigan Council award and taxation manager Penny Higgins said: “When making an application for a liability order for non-payment of council tax, the regulations provide that the billing authority can make an application to the court for the order to include a sum for costs reasonably incurred in connection with the application.

“The granting of costs is at the magistrates’ discretion. The billing authority should be able to provide a breakdown in support of their application for costs. Wigan Borough Council has had a breakdown of the costs applied for available at every liability order application hearing.

“The cost reasonably incurred in connection with obtaining a liability order is reviewed regularly.

“Applications for liability orders are usually bulk applications for a large number of cases at a time. The costs are calculated using the total costs incurred by the authority for a year divided by an estimate of the number of cases. Wigan Borough Council uses the number applied for in the previous year for this estimate.

“An application for a liability order is only made if the person liable for council tax has not paid in accordance with the demand notice served on them or the reminder. Taxpayers can avoid the incurrence of additional costs by paying their council tax on time.”

Ms Higgins says the authority’s name is listed as Wigan Borough Council on the council tax documentation because it has a WBC logo.

No limit exists on how much local authorities can apply for in costs, though Welsh councils are capped at £70. The average charged by a town hall in Greater Manchester is £84.