Lord Lucas
To ask Her Majesty’s Government what assessment they have made of arrangements whereby local authorities require bailiffs to pay them part of the fees that bailiffs have charged to debtors.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, under the provisions of the council tax regulations, local authorities are entitled to make charges to cover the costs of actions that bailiffs are taking. Those charges belong to the local authority. How those are then divided between the local authority and the bailiffs is a matter for them. Following the Transforming Bailiff Action consultation, the Government are currently implementing proposals to introduce a new, clear fee structure for bailiff action, which will be applicable across all debt areas.
Lord Lucas
My Lords, I very much look forward to the introduction of the new system but, even in these hard times, should we not discourage local authorities from adding to the costs borne by the poorest members of society? If local authorities need to raise money, should it not rather be from the richer?
Baroness Hanham
My Lords, the noble Lord knows very well, because he takes a deep interest in these matters, that there has been great concern about the fees charged by and the arrangements made with bailiffs. The consultation, which has now finished, will result in a clear description of what the fee structure should be, how local authorities are to charge for it and what will be the open and clear arrangements between local authorities, bailiffs and the debtors in question.
Lord Elystan-Morgan
My Lords, may I make a wider point? Can the noble Baroness assure the House that when court bailiffs are appointed they are appointed by circuit judges and are enjoined to discharge their duties with humanity and courtesy? Should not the same precept apply exactly to bailiffs acting for local authorities?
Baroness Hanham
My Lords, it is extremely important that bailiffs are under no illusion about how they should behave when they have to take on a debt. As the noble Lord says, they should be courteous and caring, and that will be in the guidelines, which are being produced as we speak and are almost ready. They will give clear guidance as to how bailiffs should behave and operate.
Lord Shipley
My Lords, will those guidelines explain why some local authorities are considering implementing a charging regime and taking part of the bailiff’s gross fees? Is there not a clear conflict of interest when a local authority appoints a bailiff, supervises a bailiff and then shares in the gross fees of that bailiff?
Baroness Hanham
My Lords, as I said initially, the local authority is entitled to come to arrangements with bailiffs on fees and whatever charges are made. The guidance will make clear what local authorities can do, but I agree with the noble Lord that anything that looks like a cosy arrangement between the bailiffs employed and local authorities is thoroughly undesirable.
Lord Campbell-Savours
Can we be assured that the fee structure would preclude the local authority making any profit?
Baroness Hanham
My Lords, the local authority’s responsibility is to retrieve the debt in any way it can. I think the noble Lord is referring back to the Question about what arrangements are made with the debtors who are going to collect those debts, financially. I have said pretty clearly that there will be very clear guidance on what they can and cannot do, and that cosy business arrangements are thoroughly unsatisfactory.
Lord McKenzie of Luton
My Lords, what assessment have the Government made of the consequences, including the use of bailiffs, of increased indebtedness to local authorities arising from the localisation of council tax benefit with the 10% funding cut?
Baroness Hanham
My Lords, the burden on local authorities for collecting any debt is something that they will have to work out for themselves. I do not think any assessment has been made of any additional burdens from the council tax support system, which is what the noble Lord is asking about. Again, it will be up to local authorities to make their own arrangements.
Lord Cormack
My Lords, my noble friend will know that when the noble Baroness, Lady Meacher, moved an amendment earlier this year the House voted decisively on this issue of bailiffs. Can my noble friend assure me that the noble Baroness, and others who led this campaign, are being consulted on these guidelines?
Baroness Hanham
Absolutely, my Lords. The noble Baroness, Lady Meacher, came to see me a little while ago with the chief executive of an organisation called Zacchaeus, which is deeply involved in this. We have made sure that it has been consulted and have kept closely in touch with it over the guidelines. Therefore, I can be sure that when the guidelines are produced, it will be done with the support of those who were concerned about what was happening.
Lord Laming
My Lords, can the Minister assure the House, following the question of the noble Lord, Lord Campbell-Savours, that the part of the fee that goes to the local authority will in no case exceed the cost to the local authority of calling in bailiffs?
Baroness Hanham
My Lords, the guidance on the fees will make that pretty clear.
Lord Christopher
My Lords, the first Question from the Minister’s own Benches was very apt. The Financial Times reported a couple of days ago that there had already been a significant rise in the scale of unpaid rent to local authorities because of the changes in housing benefit. What advice will the Government give to local authorities, since if bailiffs turn up people will not only have no home but no furniture either?
Baroness Hanham
My Lords, the changes to housing benefit are relatively new so I am not sure what the article was about. I can say no more, other than that local authorities will be expected to work closely and sensibly with bailiffs in a proper way.
Lord Marks of Henley-on-Thames
My Lords, if local authorities are to pay commission to bailiffs, is there not a very real concern that those same local authorities will act more aggressively in enforcement than they might otherwise do?
Baroness Hanham
My Lords, local authorities enable bailiffs to charge fees; that is the financial arrangement between them. On the question of the debt that is owed to the local authority, it will collect that in whatever way it can, but the fees charged are the bailiff’s concern.