Agenda item

Miss M Goldsmith, Directorate Finance Manager, was in attendance for this item.

1.         Mr Gibbens welcomed the inclusion of this item on the agenda as an excellent example of the POSC exercising its scrutiny role.  The item had been specifically requested when the POSC had considered its regular budget monitoring report at its January meeting.

2.         Miss Goldsmith introduced the report and pointed out that this was the first year in which debt figures had been reported to the POSC, in response to the POSC’s request to see them, having previously only been reported to the Governance and Audit Committee.

3.         The main type of debt was client-related debt, split between secured and unsecured. Cases in which a debt is secured against the client’s home needed to be also carefully monitored, as some properties may now be worth less than the value of the debt secured against them.

4.         It is anticipated that the new system of managing debt, introduced in January 2010, would have a beneficial effect. The original Visiting Officer who carried out the initial financial assessment would contact a client as soon as the client defaulted on a payment, then visit again regularly to encourage payment, the aim being to address the situation early and prevent the debt from building to an unmanageable level.

5.         In discussion, and in response to Members’ questions, the following points were highlighted:-

a)         Members welcomed the more transparent way of reporting debt, the new system of debt management, to address debt while low to avoid it getting out of hand, and the positive effect this seems to have had in reducing number of cases of outstanding debt;

b)         when considering writing-off a debt, cases were always considered individually, never en bloc. Only debts of over £10,000 would be referred to the Governance and Audit Committee. Miss Goldsmith undertook to provide Members outside the meeting with a breakdown of the number of cases, the size of debts being written off;

c)         the role of the KCC’s Internal Audit Unit was discussed, and Miss Goldsmith agreed to ask them to look at both the debt recovery process and the write-off procedures;

d)         Mr Mills emphasised that client debt and debt management was taken very seriously, and a decision to write off a debt would only be taken if there was no chance of retrieving the amount owed, or if doing so would be uneconomical, compared to the amount owed;

e)         having assessed a client’s ability to pay when assessing their  care package, KCC had a duty to collect the payments due for the services provided. Not to do so would disadvantage those clients who paid regularly and responsibly;

f)          much of the debt existing when the new debt management system was introduced in January 2010 was historical, so it was not yet possible to identify how much the new system would help to identify new clients who might be likely to get into debt in the future;

g)         apart from client-related debt, the other main type was NHS debt, which registered as a ‘debt’ each month mainly due to the timing of payments.  This type of debt did not build up in the same way as client debt, and was currently at its lowest level ever; and

h)         there was no benchmarking system which would allow Kent to compare its level of debt with those of other local authorities.  Kent had a higher level (45%) of clients paying using direct debit than most other local authorities (30 - 40%).

6.         RESOLVED that the information given in the report and in response to Members’ questions, be noted, with thanks.