Half a billion pounds owed in council tax

Local authorities are owed council tax payments totalling more than ?500m, the government has revealed.

And local government secretary Stephen Byers today warned authorities they must improve their collection figures.

English authorities collected ?11.89bn in council tax for 2000-01 by the end of March - some 95.8% of the ?12.41bn collectable. But Mr Byers said some authorities are underperforming.

"Half a billion pounds wasn't collected last year - that's money that could have been spent on local services," he said. "I've looked at the figures and I believe some councils could do a lot more to improve their collection performance.

"That's why I will be asking the worst collectors for an explanation of their bad performance."

Mr Byers is calling in the Local Government Association (LGA) for ideas on how to tackle the problem. Top of their action plan is a proposal to set up a new council tax "hit squad", aimed at upping the amount of money collected by the worst performers.

London councils in particular are expected to be targeted by the government, which could ask the new squad to go into local authorities and advise on tactics to persuade local people to pay up on time.

These are likely to include tougher enforcement of payment deadlines in the capital, through both fines and court action.

Inner London's average council tax collection figure was just 88.7% in 1999-2000, nearly seven points behind that of England as a whole.

The capital's average was dragged down by a group of particularly poor performers. Crisis-stricken Hackney council, in east London, collected less than 70% of its council tax, while Newham and Lambeth both brought in less 85%.

Officials at the Association of London Government, which represents the capital's 33 councils, say the three boroughs all suffer from a highly mobile population, and that they have also lost money over the past 10 years due to changes in their funding.

Alterations in the way the government distributes council funding cut into Hackney's cash increases by more than ?180m between 1994 and 1999, when ministers announced a temporary moratorium on any further change.

Sources close to discussions over the new panel of experts say it will be drawn from a selection of the best performing councils in the country, and that it could be supported by the local government Improvement and Development Agency.

The panel could act like a council tax collection inspectorate, entering councils and giving direct advice to revenues and benefits staff.

Alternatively, if little or no money is forthcoming, it could simply become an advisory panel, offering lectures or publications.

Whitehall has portrayed the move as an example of the new attitude Mr Byers is taking towards local councils - tackling the worst in a bid to win the argument for more freedom for the best.

It is a sentiment the local government secretary sought to underline last week, when he told council leaders at the LGA conference: "We must find ways of driving up standards across the board.

"I'd like to do this together - that has to be the preferred way forward. Although, if necessary, we will use the powers we have to ensure that communities get the quality services they need."