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					                                                               Item No.
City of Westminster


Decision -maker             Date         Title of Report

Cabinet Member for            May        Council Tax and NNDR – Proposal
Finance and Support         2005         to increase court costs for Liability
Services                                 Order applications

Classification                           Report of
General Release                          Director of Finance

Wards Involved             All
Policy Context             To maintain a low Council Tax
Financial Summary          It is estimated that the proposed increase in court
                           costs will generate approximately £320,000
                           additional revenue in a full financial year above
                           the 2004/5 Actual and £200,000 in excess of the
                           2005/6 budget.

Report Author              Martin Hinckley on 020-7641-2611 or at
                           mhinckley@westminster.gov.uk


1.    SUMMARY OF THIS REPORT

1.1   This report recommends that the Cabinet Member approves a proposal to increase
      the level of court costs for Council Tax Liability Order applications from £55.00 to
      £85.00 and for NNDR applications from £55.00 to £100.00.

1.2   It should be noted that the recommended increase in the level of costs would be
      subject to agreement by Horseferry Road Magistrates Court.

2.    RECOMMENDATIONS

2.1   That Cabinet Member approval is given to the proposal to increase the level of court
      costs for Council Tax Liability Order applications to £85.00 and to £100.00 for
      NNDR Liability Order applications.

3.    BACKGROUND

3.1   The recovery processes available for Council Tax and NNDR collection are
      governed by statute. Court action is commenced via an application to the
      Magistrates Court for the issue of a Liability Order.

3.2   The City Council is allowed to request that the Magistrates Court grant costs on
      each Liability Order application. The level of costs for standard applications is
      agreed in advance with the court.
3.3   In 2003/4 Horseferry Road Magistrates Court agreed to increase the level of costs
      from £40.75 to £55.00. This followed approval of the recommendation to increase
      costs in a report to the Cabinet Member for Finance and Support Services dated 8
      August 2003 (decision date 18 August 2003).

3.4   In 1997 the level of costs were set at the same level across London, the
      negotiations being undertaken by the London Borough of Croydon, who acted as
      London’s representative in discussions with the London courts. Since 1997 some
      London boroughs have managed to negotiate individual increases with their local
      courts.

3.5   In 2003/4 the practice of a London-wide agreement was revived by the London
      Revenues Group, a group made up of senior Revenues practitioners from the
      London Boroughs. This is because when Ealing Council tried to negotiate an
      increase with their local court, it was recommended to them that a pan London
      approach be made through the Legal Forum for London (i.e. all the London
      Justices’ Clerks in solemn conclave).

3.6   The Legal Forum for London has recently agreed revised upper limits for court
      costs of £88.00 for Council Tax and £160.00 for NNDR with effect from 1
      September 2004.



4.    WHETHER TO DIFFERENTIATE BETWEEN THE LEVEL OF COURT COSTS
      FOR COUNCIL TAX & NNDR

4.1   The City Council currently has the same level of costs for Council Tax and NNDR
      Liability Order applications. It has been identified that some local authorities have a
      higher level of court costs for Non-Domestic Rate than Council Tax. It appears to
      have been accepted by their local courts that the increase was more in keeping with
      the larger sums involved for NNDR, therefore the higher level of costs would be
      more of a deterrent.

4.2   In last year’s report recommending an increase in the level of Council Tax and
      NNDR costs, it was recommended that the City Council did not differentiate
      between the level of costs for Council Tax and NNDR. However, the Legal Forum
      for London has recently agreed that it is acceptable to have different levels of court
      costs for Council Tax and NNDR. It is therefore proposed that the City Council
      approaches Horseferry Road Magistrates Court with an application to increase
      NNDR costs to a higher level than that set for Council Tax.


5.    THE LEVEL OF COSTS

5.1   The City Council’s neighbouring boroughs have currently set the following levels of
      court costs:
      London Borough                  Council Tax             NNDR Liability Order
                                      Liability Order         Costs
                                      Costs
      Kensington and Chelsea          £85.00                  £100.00

      Camden                          £77.50                  £160.00

      Hammersmith & Fulham            £80.00                  £100.00

      City of London                  £50.00                  £70.00

      Brent                           £65.00                  £65.00

      Lambeth                         £85.00                  £100.00

      Southwark                       £85.00                  £100.00

      Wandsworth                      £105.00 (Proposed)      £115.00 (Proposed)

5.2   It is recommended that the City Council seek to mirror the level of costs applied by
      the London Borough of Kensington and Chelsea. Subject to agreement by
      Horseferry Road Magistrates Court, the recommended level of court costs being:

                                                Council Tax         NNDR
      Summons costs                             £64.30              £74.30
      Court Fee                                 £0.70               £0.70
      Liability Order costs                     £20.00              £25.00
                                                £85.00              £100.00


5.3   An alternative option would be to increase the level of NNDR court costs to the
      maximum level set by the Legal Forum for London (£160.00). This level would
      however be out of step with the majority of our neighbouring Inner London
      boroughs and represent a 190% increase in relation to the current level of £55.00. It
      may also be difficult to obtain the agreement of Horseferry Road Magistrates Court
      to such a large increase.

5.4   It is proposed, subject to approval of the recommendations, that the City Council
      write to Horseferry Road Magistrates Court seeking an immediate increase in the
      level of costs. However, it should be assumed that it is unlikely that any increase
      will take effect prior to 1 July 2005, due to the timescales involved in obtaining
      agreement from the court.

5.5   It is perceived that Horseferry Road Magistrates Court are likely to accept the
      proposed increase without requesting a substantial amount of additional supporting
      evidence. Although the increase represents a significant increase on the current
      level, it would mirror the level set by our neighbouring boroughs.

5.6   It is anticipated that the proposed increase in court cost will act as an incentive to
      the borough’s Council Tax and NNDR payers to ensure that their instalment
      payments are kept up to date. It is planned to “advertise” the increased level of
      costs within the Council’s Council Tax and NNDR reminder notices (the notices sent
      prior to court action).
6.     FINANCIAL IMPLICATIONS

6.1    It is estimated that the proposed increase in Court costs will generate approximately
       £320,000 additional revenue in a full financial year above the 2004/5 Actual and
       £200,000 in excess of the 2005/6 budget.

6.2    Subject to agreement of the proposed increase by Horseferry Road Magistrates
       Court, it should be possible to achieve £160,000 of additional revenue in 2005/6
       over 2004/5 Actual and £50,000 over 2005/6 budget. (based on an effective date of
       1 July 2005).




7.     LEGAL IMPLICATIONS

7.1    There are no legal implications arising from this report.


8.     INFORMATION TECHNOLOGY, PROPERTY OR CUSTOMER SERVICES
       INITIATIVE IMPLICATIONS

8.1    There are no implications arising from this report.


9.     STAFFING IMPLICATIONS / STAFF CONSULTATIONS

9.1    There are no staffing / staff consultation implications to this report.


10.    BUSINESS PLAN IMPLICATIONS

10.1   This report meets the Business Plan requirement to maintain a low Council Tax.


11.    WARD MEMBERS COMMENTS

11.1   As this report relates to all wards, no ward member consultation was required.


12.    REASON FOR DECISION

12.1   The recommended increases will generate additional income for the City Council.
       The increased level of costs will also provide an additional incentive for the
       borough’s Council Tax / NNDR payers to keep up to date with their instalment
       payments.
12.2   The alternative options would be to leave the court costs at their current level or to
       increase to a level below that set by the Council’s neighbouring boroughs. This
       would result in the Council not maximising its potential income in this area.

12.3   An alternative option would be to increase the level of NNDR court costs to the
       maximum level set by the Legal Forum for London (£160.00). This level would
       however be out of step with our neighbouring Inner London boroughs and represent
       a 190% increase in relation to the current level of £55.00. It may also be difficult to
       obtain the agreement of Horseferry Road Magistrates Court to such a large
       increase.

13.    OUTSTANDING ISSUES

13.1   There are no outstanding issues.


IF YOU HAVE ANY QUESTIONS ABOUT THIS REPORT PLEASE CONTACT MARTIN
HINCKLEY, CONTRACTS PERFORMANCE MANAGER, ON EXTENSION 2611 OR BY
EMAIL AT mhinckley@westminster.gov.uk

				
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