H&F Ethical Debt Collections launches new public sector approach

Hammersmith & Fulham Council and debt purchaser 1st Credit have today officially launched their joint venture, H&F Ethical Debt Collections, at the Local Government Association’s annual conference in Birmingham.

The partnership changes the way public sector debts are handled, ending the two-tier treatment of customers in debt by applying Financial Conduct Authority (FCA) standards to public as well as private sector debts. Those with public sector debts too often experience poor customer treatment and high levels of court action.

H&F Ethical Debt Collections is committed to drastically reducing the use of bailiffs in the public sector, the use of which often exacerbates hardship for individuals and places greater burden on the public purse.

The joint venture will now roll out its services to other local government organisations. It will be raising awareness at this week’s Local Government Association conference, which is due to attract more than 1,300 local government delegates.

1st Credit is an award-winning debt purchaser, known for taking a highly ethical approach to debt collection – in particular treating customers fairly. It has a +44 Net Promoter Score and consistently achieves top ratings from Investor in Customers.

H&F Ethical Debt Collections has already started taking over Hammersmith & Fulham Council’s collections, beginning with former tenant arrears and housing benefit overpayments. Other debt-types will follow on a phased basis, with council departments given the power to decide how and when to use the services, sharing their insights and expertise.

As well as debt recovery and commercial aims, the joint venture will help residents avoid debt by identifying individuals at risk of falling into financial difficulty and working with them to avoid that.

Cllr Max Schmid, Cabinet Member for Finance at Hammersmith & Fulham Council, said the new approach will be transformative.

“We are delighted to launch H&F Ethical Debt Collections at the Local Government Association’s annual conference in Birmingham this week. Local government has faced many severe cutbacks and councils are working hard to combat the effects of austerity. At Hammersmith & Fulham we are determined to offer an ethical approach to debt management that helps both residents and councils facing serious financial difficulties.

“Pursuing people aggressively is both damaging and counter-productive. The consequences of bad debt collection can be devastating to the wellbeing of residents. In addition, costs of temporary accommodation, increased demand on temporary housing, health, education and social services resulting from poor debt management put a strain on the public purse.

“There is a huge gulf between best practice in the private sector and normal practice in the public sector and we are determined that Hammersmith & Fulham becomes a shining example of good practice and can help other councils do the same.”

Eddie Nott, UK Managing Director of 1st Credit, added: “It is time for public sector debt collection to change. We have developed analytical, ethical ways of working with individuals in debt to resolve their financial problems – protecting the vulnerable while maximising the money collected.

“With an organisation the size of Hammersmith & Fulham there is enormous scope to set up a system of ethical debt collection that increases efficiencies, raises funds for the council to reinvest in local services and protects its residents from the negative effects of debt.

“We are now able to extend these services to all local government organisations and believe the time is right for transformation in this sector.”