A London council is to hire bailiffs on contracts worth almost £2m to hunt down council tax dodgers.
Lewisham already has in-house “enforcement agents” but wants contractors to target former residents who have left the borough with outstanding bills.
They could also be tasked with confronting current residents or businesses who have failed to pay their council tax or business rates, despite approaches from council debt collection staff.
It is the latest example of how London councils are having to adopt increasingly hardline tactics to recoup every penny possible due to being in financial dire straits.
It came as Enfield council became the latest borough to bid for “exceptional financial support” from the Government to enable it to care for its most vulnerable residents.
Enfield is seeking £30m. Neighbouring Haringey is seeking a £37m emergency bailout.
In Lewisham, a report approved by the borough mayor and cabinet this week said: “In order to support the Council’s financial position, it is essential that we maximise council tax and business rate collection.
“Lewisham already has in-house EAs [enforcement agents] but there is a need to supplement this with external baillifs who will contact debtors now living outside of Lewisham but also to make a further effort at recovering debt where Lewisham’s own EAs have failed.”
The Labour-run council has a potential annual income from council tax of £186m from the 135,000 homes in the south-east London borough.
In addition, there are 6,300 businesses that owe about £60m in business rates annually.
Lewisham is already one of the 15 London boroughs that charges in excess of £2,000 for benchmark band-D council tax bills.
More boroughs are expected to break the £2,000 threshold when their demands for the 2025/26 financial year are issued over the coming weeks.
Lewisham said it would carry out credit reference checks on debtors before deciding whether to refer them to bailiffs.
This is to ensure there is a reasonable prospect of recouping money and that the debtor is “more of a ‘won’t pay’ case rather than a ‘can’t pay’.”
The council said: “By doing so, we will be avoiding any unnecessary action being taken against tax payers who are clearly unable to pay the debt and alternative arrangements will be considered through personal engagement to try and consider longer-term arrangements to clear the debt.”
It said there would be no direct cost to the council of agreeing contracts with bailiffs – who it would look to hire for up to five years – as they deducted their fees from payments made by debtors.
Councils also have the option of recovering debts by obtaining permission to deduct money from benefit payments.
“Removal and sale of goods is a rarity and not commonly used but, in the event of this happening, it would only take place once all previous options had been exhausted,” the council report said.
Lewisham wants to hire three bailiff firms, with the contracts having a total estimated value of £1,995,000.
It said: “This contract is known as a concession contract which is where the contractor is paid through a third party and not the council.”
Enfield’s deputy leader Tim Leaver said: “In common with many other councils, we have applied to the Ministry for Housing, Communities and Local Government for £30 million exceptional financial support to be made available if required.
“Enfield council faces significant financial challenges due to years of government underfunding together with the impact of the national homelessness crisis and rocketing demand for social care support.
“The Institute for Fiscal Studies ranks Enfield as the 7th most underfunded authority in the country.”