Threat of legal action just two weeks into Capita Contract

The Capita contract does not appear to have got off to a good start. I heard earlier in the summer that the bailiffs contract has been torn up even though it was mid term and that Capita had appointed Equita, their own bailiff company.  The original contract was with two companies, Newlyn Collections Services Ltd
and Phoenix Commercial Collections Ltd and you can read the authorisation of that contract here.

Today I have received news that, unsurprisingly, Newlyn and Phoenix are not very happy about the situation and they have issued a lawyers letter to the council employee who gave  notice of the termination, the chief executive of the council and every councillor. It is a four page letter which make some pretty serious points including the threat of injunctive relief if Barnet/Capita pass any further bailiff instructions to Equita - see below:

The lawyers not only allege that the council has breached the contract but they call into question the probity with which the contract has been handed on a plate to Equita. The letter goes on to state:

This is the real issue here. We have Capita who are administering Council Tax collection through the NSCSO contract  (now called Customer and Support Group or CSG) and if people fail to pay they send the demand straight to their own firm of bailiffs, Equita, who will also make money by receiving the instruction. Whereas in the past there may have been some attempt to come to an arrangement with late payers, there is now a massive incentive for Capita to pass all such problems straight to Equita.

Over the last two years I have asked many questions about procurement procedures that Capita will have to assume and about potential conflicts of interest. Ultimately it is our money they are spending therefore they should maintain exactly the some openness and transparency. In this case Capita seem to have fallen at the first hurdle.

Councillors cannot ignore this as it has been sent to every one of them and when  lawyers get involved it gets expensive. Barnet may have published the contract yesterday, albeit with many redactions, but who is actually checking to see if it is being properly administered.

Use of bailiffs up by 52% in Barnet

Yesterday, The Guardian ran a poll on Council's usage of bailiffs. Coincidentally I had just received an answer to my FOI request on the usage of bailiffs to collect unpaid council tax and I was shocked at the results.

Re Council Tax	2010/11	2011/12	2012/13
Number of cases passed to bailiffs for unpaid council tax	6905	6637	10102

I was particularly surprised at the massive 52% jump in 2012/13 especially as this is before the new rules concerning bedroom tax and the requirement for benefit claimants to make an 8.5% contribution to their Council Tax kicked in.

If I were Richard Cornelius I would be very worried that so many cases are being referred to bailiffs and what will happen next year when Capita will be in charge of Council tax collection especially as they own a firm of bailiffs, Equita. I would also suggest reading a very interesting article from the Big Issue about the use of bailiffs and their charges.