Corporate Debt Management Policy 2025-28

1. Purpose

1.1 This policy is designed to set out a robust framework for Norwich City Council (NCC) employees and provide clear guidance for all council officers on the recording, reporting, recovery, and monitoring of income.

1.2 This policy is aligned with and supports the overarching Corporate Debt Strategy, which outlines the key objectives and guiding principles for managing the council’s overall debt portfolio. The Strategy provides the strategic framework within which this policy operates, including processes, practices and use of technology and innovation. This policy translates those strategic objectives into operational guidelines and principles to ensure consistent and effective debt management.

1.3 This policy covers all debts shown in section 4.

1.4 The council has a legal duty to ensure cost-effective billing, collection, and recovery of all sums due to the council.

1.5 All service areas must follow this policy to ensure that the council maximises income by using a co-ordinated approach whilst having due regard to the customer’s ability to pay.

1.6 Below this sits the new Vulnerability Framework, which gives operational guidance for dealing with and supporting individuals and customers who may find themselves in difficulties with debt in a fair and transparent way.

1.7 For the avoidance of doubt when this policy states ‘customers’ it includes both individuals, whether private citizens or sole traders and organisations.

2. Objectives

2.1 The policy objectives are:

To treat customers fairly when assessing ability to pay.
To know your customer (conduct financial due diligence on all commercial customers).
To follow all appropriate legislative requirements and procedures in an efficient and effective way.
To use all methods available to recover debts.
To ensure that benefit entitlement is accurately and efficiently applied to maximize the debtor’s income.
To have clarity in the enforcement action process.
To identify and assist those who face difficulties in paying at an early stage and to actively encourage them to contact us.
To signpost potential debtors to advice agencies and other sources of support and do everything possible to encourage them to use them.
To identify customers who face barriers in understanding what is expected of them e.g., because of age, language, culture or disability.

3. Outcomes

3.1 The outcomes expected from this policy are to:

Set out the general principles of debt management across all services provided by Norwich City Council in accordance with the Corporate Debt Strategy & Vulnerability Framework.
Ensure a consistent approach to the management of debts across the authority.
Obtain prompt payment to agreed terms and conditions.
Identify and enforce against deliberate non-payers or people who delay payment without good reason.
Set out provisions to assist customers to make payment agreements appropriate to their circumstances.
Ensure individuals and organisations financial circumstances are considered on a case-by-case basis before enforcement proceedings are commenced.

4. Debts to which this policy applies

4.1 For the avoidance of doubt, this policy document applies to all debts and income due to the council including but not limited to:

Council Tax
Business Rates
Overpaid Housing Benefit
Overpaid Council Tax Reduction
Council Housing Rent, current and former tenants
Rechargeable repairs and voids
Residential Garage Rent
Commercial Property Rent and Service Charges
Leaseholder payments
Planning CIL (Community Infrastructure Levy)
Other sundry income debts (incl. licensing, halls and events, statutory notices, housing service charges, homeless prevention loans, garden waste collection etc.)
Car parking excess charges
Recovery of enforcement costs and civil penalties, including works in default
Charging for discretionary services or any money due to the council under terms of an agreement to pay for goods, services, or property.

5. Priority debts

5.1 Priority debts are those debts that can result in loss of essential service, loss of home or imprisonment.

Housing

Mortgage/rent
Council Tax
Secured ;oan

Utilities

Electricity
Gas
Telephone

Other

TV licence
Court fines
Overpaid tax credits
Hire purchase
Income Tax, VAT, National Insurance
Child maintenance

5.2 Non-Priority debts could include:

Credit cards
Unsecured loans
Unpaid water bills
Overpayment of benefits
Penalty charge notices

6. Roles and responsibilities

Financial Services leadership

6.1 The leader of the finance organisation is the Director of Finance (Sec 151) who has statutory responsibilities in relation to the council’s financial affairs.

6.2 In addition, the Director of Finance is responsible for regulating and controlling the finances of the council and hence he/she shall be responsible for the proper administration of the council’s financial affairs.

6.3 Heads of Service have responsibility for the raising and recording of debts in relation to Services they manage.

6.4 Income relating to all types of debt should always be handled in accordance with the council’s Constitution and the Financial Regulations.

6.5 Where the council is made aware that a debtor owes multiple debts to the council and unless the debtor advises to the contrary, debts will be considered in a priority order, to avoid the customer losing their tenancy, or going to prison for non-payment as follows:

Rent arrears
Council Tax arrears
Business Rates
Other

7. General principals

7.1 The general principles adopted in this policy are as follows:

To ensure a professional, consistent, and timely approach to debt recovery action across all of the council’s functions.
To limit the circumstances in which credit is offered by considering the customer’s circumstances and ability to pay prior to granting any credit terms, and to only extend credit to those customers in a position to pay the debt in accordance with the council’s terms.
If the customer’s circumstances do not justify the granting of credit, payment in advance should be offered for the goods/services.
For some debts, particularly those paid periodically, such as garden waste, periodic rents, or licensing, the preferred method of payment is by electronic means and where possible direct debit should be selected.
To promote a coordinated approach towards sharing debtor information internally and managing multiple debts owed to the council.
To improve the speed of collection and the levels of income collected by the Authority.
To ensure that debts are managed in accordance with legislative provisions and best practice.
To consider the impact on the debtor of the consequences of any recovery options pursued, including their mental wellbeing and the proportionality of the option chosen.
To try and protect customers from undue financial hardship by ensuring realistic payment arrangements are agreed upon.
Where appropriate, to encourage the debtor to make contact with relevant organisations for debt management advice, and to do everything possible to ensure they take up these options.
To differentiate between the debtor who will not pay, and the debtor who cannot pay, and take appropriate action in either case.
To maintain debt recovery procedure notes for staff and regularly update these, as well as provide face to face training, including as part of the relevant induction process.

8. Delivering the policy

8.1 Delivering the policy involves several processes which are explained in more detail below:

Customer on-boarding due diligence
Raising of invoices
Methods of payment
Refunds and contras
Collection and recovery
Social inclusion – the ability to pay.
Bad debt provision
Writing debts off

Customer on-boarding and credit risk due diligence

8.2 The process used to set up a customer on the system and to assess their credit risk is key to maximising the ability to recover debts. Making sure that you are dealing with the correct customer you must perform what is called ‘due diligence.’ Due diligence takes the form of collecting accurate legal name and address details and performing a credit check, typically with Dun & Bradstreet/Experian and using Companies House to ascertain the credit score and legal details of the organisation to determine the risk of trading with the customer and the likelihood of obtaining recovery of the debt.

8.3 This information is used to set up the correct customer in the finance system to allow accurate invoices to the produced and sent to the customer for prompt payment.

8.4 Before providing requested goods or services to a company for more than £10,000 for which payment will be invoiced, officers must carry out a credit check and/or company search to establish the financial standing of the organisation and if concerns are raised, a payment in advance should be sought.

Raising invoices

8.5 Invoices are generated accurately and promptly based on agreed upon terms.

When charging for goods and services provided, the council will make it as easy as possible for customers to pay by seeking to raise the invoice within 10 working days of delivering the service or goods or of the commencement of the period where service covers a period of time.

8.6 Invoices include all relevant details, such as billing period, due date, itemised charges, and payment instructions. The invoice frequency (e.g. monthly, quarterly, or annually) is clearly indicated. Invoices will be sent via secure methods, either via email or post but email will be the preferred default method.

8.7 All information will be clearly written, without the use of jargon.

Methods of payment

8.8 The council will promote the use of Direct Debit as a preferred payment method, maximising the use of this wherever possible. It will discourage the use of cash and cheque, by persuading customers to use more electronic methods of payment.

8.9 The council will accept payment of debt by credit/debit card.

8.10 All Invoices/Demand Notices will include information on how and where payments can be made i.e. listing the various options we offer, for example:

Bank account details for bank transfers
Direct Debit
Standing Order
Pay Point
Post Office
Card payments
Internet payments

8.11 Customers may request an instalment arrangement for debts which will be considered by the relevant service area. The instalment amount offered, and frequency of the payments, will be based on an assessment of the likelihood of the customer meeting the arrangement. The emphasis will be put upon Direct Debit payments when agreeing such arrangements.

8.12 Whatever the method of payment individuals must ensure that payments made reach the council by the due date.

8.13 Housing Benefit overpayments will be recovered from on-going benefit /Universal Credit where possible.

8.14 Tax Reduction excess payments will be recovered from the claimant’s Council Tax account where possible.

8.15 For debts under £20 alternative methods of payment should be sought such as by card/bank payment rather than by invoice.

Collection and recovery

8.16 The collection of income in respect of invoices/demand notices raised must follow a standard course, which fully documents the efforts made to settle the debt. It is recognised that certain debts such as Council Tax and Business Rates will have a more regulated period for recovery.

8.17 The recovery process for each type of debt covered by this policy is shown in Appendix 1 with the following principles applying to unregulated debt:

8.18 Invoices raised in respect of services delivered are normally due for payment immediately although the maximum payment terms are 30 days unless otherwise agreed with the Director of Finance (Sec 151).

8.19 If no payment is received within 10 working days of the invoice date or agreed payment terms a reminder letter will be issued.

8.20 For Sundry Debts, where debts in respect of services provided remain unpaid after the first reminder, a second debt notice is raised, and the provision of further services will cease (where possible) until the debt is paid.

8.21 If no payment is received within 10 days of the reminder letter, a final demand will be sent.

8.22 If no payment is received within 10 days further recovery action will be initiated which may include legal proceedings and/or referral to debt collection agencies.

8.23 Where legislation permits, the council will seek to levy and recover from the debtor all costs/fees that are legitimately due from the debtor to the council or its agents. Only in exceptional circumstances, where it would not be in the public interest to pursue costs/fees will they be waived.

8.24 The council will contract with Debt Collection Agencies in respect of unregulated debt that remains unpaid after the final reminders have been issued. Heads of Service will be expected to use agencies contracted by the council.

8.25 All debts will be taken into consideration when referring the debt for legal recovery. Where multiple debts are owed, the council will endeavour to consolidate those debts before taking recovery action.

Customers who find themselves in arrears

8.26 Customers are encouraged to contact us early if they are having difficulty paying any debt owed to the council and advise them where to get independent advice as appropriate. Many customers are unaware of their rights and responsibilities and of the availability of a variety of payment options.

8.27 If customers contact the council as soon as they fall into arrears, we will discuss the situation and prepare a payment plan. This will help customers to be in control of their debts.

8.28 When customers contact us, we will:

Comply with current service standards.
Check whether they should be paying less or nothing at all by ensuring that all the relevant benefits, reductions, discounts, reliefs, exemptions, and rebates are being claimed.
Advise on the most appropriate payment methods.
Make a realistic payment agreement if appropriate.
Advise them to contact an independent advice agency if appropriate.
Expect priority debts to be given precedence over other debts.

8.29 All information collected by the council is governed by the General Data Protection Regulations 2016/679 which were implemented on 25th May 2018.

Breathing space

8.30 If you live in England or Wales, a debtor can get temporary protection from creditors while they get debt advice and make a repayment plan. This scheme is called ‘Breathing Space.’

To apply for the ‘Breathing Space’ scheme, a debtor would need to talk to a debt adviser. They will apply on the debtors behalf if it is the right thing to do.

8.31 A debtor can find a free debt adviser on the MoneyHelper website and can get confidential advice online, over the phone or in person.

If a debtor is receiving mental health treatment and cannot speak to a debt adviser, someone else can do so on their behalf. A debtor receiving mental health crisis treatment will have protection from creditors for the length of their treatment, plus another 30 days.

Vulnerability and the ability to pay

8.32 Ability to pay is a paramount concern when considering debt recovery; however, we will also take into account each individual’s circumstances. For those that we identify as vulnerable we will work across service areas and with external agencies to achieve the best outcome, which balances the council’s need to recover debt with the well-being of the individual/family. Reference can be made to the Vulnerability Framework for more guidance on dealing with vulnerable individuals.

8.33 Our Enforcement Agents also identify vulnerable cases and have protocols in place for supporting vulnerable debtors. The Enforcement Agent will report any potential vulnerable cases after establishing the debtor or their partner falls into any of the established definitions of vulnerability.

8.34 A customer can be vulnerable in lots of different situations, for example if:

disabled
or seriously ill
have mental health problems
have small children or are pregnant - especially if a single parent
elderly
does not have English as a first language
have been the victim of a crime
become unemployed
a death in the family

8.35 This is not a prescriptive list but potential indicators. All individual cases will be considered and decided upon their merit.

8.36 Where applicable, an “income and expenditure” form can be used to ensure that officers can ascertain a customer’s total income and expenditure, and agree a consolidated affordable payment, which will clear all overdue sums over an appropriate period.

Hardship relief

8.37 The council has the authority to reduce council tax payments in cases of financial hardship. Each application is assessed individually to decide if relief is warranted.

8.38 The council can offer hardship relief from business rates to businesses that are having temporary financial difficulties, where the business owner would suffer financial hardship and it is in the best interests of the community to give relief.

Information and advice

8.39 The council provides information to all debtors on its website www.norwich.gov.uk which covers all services and gives details on how to pay all debts under the relevant debt type. Information is also included on bills, statements and letters.

8.40 Information is available in a variety of formats and languages when requested.

8.41 Staff will promote the services of qualified debt advisers i.e. Citizens Advice Bureau, National Debt-Line, Neighbourhood Advice Centres, Money Advice (MA) etc.

Equality statement

8.42 We will be consistent and fair in our dealings, regardless of any protected characteristic. By administering this policy, we will assist with Financial Inclusion by offering support to enable debtors to maximize their income and to help prevent the build-up of debt.

8.43 When people get into arrears, we will:

ensure that as far as possible, payment arrangements reflect the ability to pay as well as the level of debt owed
expect Priority Debts to be given priority over other debts owed to the council
work with recognized advice agencies wherever possible to reach an acceptable arrangement for the recovery of the debt

Refunds and contras

8.44 Where refunds are required from an NCC account, the officer responsible will check other areas of the councils’ business to ascertain whether any debt is owed to the council for any other goods or services provided, and take that indebtedness into account, before making any refund. If another debt is owed, the customer will be advised that any credit will be used to offset that debt unless they advise to the contrary.

8.45 Likewise, when a debtor is also a supplier to the council, the council will seek to offset any overdue debts owed to the council from the monies owed to the supplier. All future supplier contracts should include a clause clarifying this right.

Bad debt provision

8.46 The Director of Finance (Sec 151) in conjunction with Heads of Service must ensure there is adequate provision for Bad Debts, in accordance with CIPFA Code of Practice on Local Authority Accounting in United Kingdom – A Statement of Recommended Practice.

8.47 Bad debts which are usually an amount owed by a debtor that is unlikely to be paid should be reviewed quarterly to establish if circumstances have changed and the debt is now recoverable. This is particularly relevant to debt incurred as a result of works carried out in default of statutory notices.

8.48 A separate bad debt provision is held for each service area so that any increase required in the provision will be charged to the service area concerned. Conversely, if the debt for which a bad debt provision is paid then the provision for that debt will be credited back to the relevant service area.

Writing debts off/on

8.49 All debts of the council will be acted on in accordance with its Financial Regulations. If the debt remains unpaid, after exhausting all appropriate recovery methods, the debt should be written off. All requests to write off debts must be approved by the appropriate authority as per the Financial Regulations.

8.50 It would normally be expected that debts to be written off would consist of:

Cumulative debts under £50, where no payment has been received within six months of sending the final demand.
All debts where an Enforcement or Debt Collection Agent advises they are unable to collect, and all options are exhausted - in these circumstances the Director of Finance (Sec 151) will deem it not cost-effective to pursue.
All debts where Legal Services advise the debts are irrecoverable or that legal action is unlikely to be cost effective.
Debtors who have absconded/ or have been unable to be traced.
Bankruptcy /Liquidation of debtor.
Limitations Act, where debt is older than 6 years old and no recovery action has commenced.
Debt Relief Orders.
Debtor is deceased and there are insufficient funds in the Estate to clear the outstanding charge.
The debt is uneconomical to collect meaning the cost of collection outweighs the value of the debt recovered.
In cases of vulnerability and/or ill health/terminal illness where collecting the debt would cause further hardship (usually for benefit overpayment cases).

8.51 Once appropriate authorisation has been received and final authorisation for the write off obtained as appropriate, the debt will be removed from the relevant accounting system and charged against the appropriate bad debt provision.

8.52 Where circumstances change and it becomes possible to collect the debt then it will be written back on to the account and pursued.

9. Monitoring

9.1 It is the responsibility of the council to ensure the policy is effective through monitoring by considering the indicators listed below:

Rate of collection (against targets set)
Accounts receivable ageing profile
Recovery of housing benefit overpayments
Number of cases reaching each stage of recovery
Number of cases where attachments of benefit/earnings are made
Number of cases being referred to Enforcement Agencies
Number of cases where recovery is suspended due to arrangements being made.
Number of cases with arrears outstanding at year end
Amount of arrears outstanding monthly and at year end
Number of complaints received where policy is not being followed.
Bad Debt Provision (BDP) by service area, at least quarterly
Audit recommendations

10. Other information

10.1 The council will train staff who advise the public & organizations on debt matters to be aware of the benefits, discounts, reliefs, and exemptions that may be applied to ensure that take-up is maximized.

10.2 Staff responsible for the recovery of debt will all complete the relevant Safeguarding awareness training as part of their induction and will have regular refresher training in accordance with council policy.

10.3 Staff will undertake other debt recovery training as part of their role to enable them to recognize vulnerability issues and their trigger points and identify ways to manage debt appropriately in these cases. Where necessary the council will assist vulnerable customers by discussing their case with an appropriate adult, where authority to discuss has been obtained.

10.4 The supporting documents relating to a demand/ invoice must be made readily available to Financial Services as and when requested. All documentation relating to a demand/ invoice will be kept either in paper or scanned image format in accordance with the services policy which is to hold supporting documents for a period of up to 6 years.

Appendix 1

Type of debt	Regulated recovery process	1st reminder	2nd reminder	Final demand
Sundry debts	Dunning process	14 days after due date	30 days after due date	60 days after due date
Council Tax	Yes	7 days after due date If payment not made, a summons will be issued.	7 days after due date If payment not made, a summons will be issued.	Sent after 3rd instance of a missed payment. Right to instalments is lost; remaining balance is due in full. If payment is not made in full, a summons will be issued.
Business Rates	Yes	14 days after due date If payment not made, a summons will be issued.	Not issued	14 days after due date If payment not made, a summons will be issued.
Housing rent	Yes	2-3 weeks in arrears	Pre-Notice of Seeking Possession (NSP) warning then NSP 4-6 weeks rent in arrears	N/A
Housing Benefit overpayments	Yes	7 days after due date	Not issued	14 days after 1st reminder
Excess Charges	Yes	After 28 days of the penalty notice being raised the owners details are requested from the DVLA. Once the details are received a 1st reminder is sent out.	14 Days after the 1st reminder letter is sent	21 Days later notification of enforcement agent action is sent
Commercial property rent	Yes	7 days after due date	21 days after due date	21 days after due date (2nd reminder is final demand)
Leaseholder payments	Yes	14 days after due date	7-14 days after due date	Letter to lender, Application for determination of the debt in the First Tier Tribunal then a Forfeiture application.

Policy information

Owner: Debt Manager
Approval level: Executive Leadership Team (ELT)
Version: v3
Published date: June 2025
Review period: 3 years
Review date: 2028
Relevant legislation or regulation: Included in the policy

Version control

Date	Version	Reason	Author
05/04/2025	V1	Draft	Debt manager
10/04/2025	V2	To ELT	Debt manager
08/05/2025	V3	To Cabinet	Debt manager