Council bosses have backed plans to tackle rent and tax arrears in the borough by appointing a debt collection firm.
This week, South Tyneside Council’s cabinet rubber stamped the contract with judicial services firm, Marston Holdings Ltd, who will deal with those who fail to pay bills on time.
As well as enforcing failed debt payments on behalf of the council and South Tyneside Homes, the firm will also take from debtors at the local authority’s request.
This will be done “even where it would not be cost effective”, a council report states, and could be used for debts perceived as non-priority, including business rates.
Cabinet member for resources and innovation and chairman of South Tyneside Homes, Coun Ed Malcolm, said enforcement agents were an “important tool” in tackling the issue.
Speaking at South Shields Town Hall on Wednesday, he added they would serve as a “last resort” or when “other methods have been unsuccessful”.
In October 2017, housing bosses admitted they were trying to claw back £2m owed by 7,000 of the council’s 18,000 tenanted households – an average of £285 each.
Last year, 3,000 cases were also referred to an enforcement agency and of these, around 40 per cent were resolved without the need for a visit from an enforcement agent.
South Tyneside Council state they currently collect 9% of council tax and business rates debt, amounting to £90m a year.
A council spokesman also confirmed the use of enforcement agents has reduced with taxpayers having greater flexibility over method of payment, frequency and amount.
“Though we rigorously pursue debts, we’re of course concerned when people fall behind with payments and would urge anyone in this situation to contact us as soon as possible so that we can explore flexible repayment arrangements that take people’s circumstances into consideration,” he added.
New enforcement agents would recover their costs through charges applied to the debtor and no charges are passed to South Tyneside Council.
The 36-month contract for Marston Holdings Ltd will start next month and could be extended for further two periods of 12 months in future.
Chris Binding , Local Democracy Reporting Service