Hammersmith & Fulham (H&F) council will stop using bailiffs to collect tax debt and instead use a more ethical approach, from April 2018.
The council announced its new approach, which aims to save public funds and help residents avoid debt in the first place, this week.
H&F council and the debt purchaser 1st Credit entered into a joint venture earlier this year, with plans to improve the treatment of those who owe debts to the council and offer debt management services to all local authorities.
The scheme will see Financial Conduct Authority standards applied to the collection of both public and private sector debts.
The council said the scheme will mean debtors are treated with courtesy and respect and never asked to pay more than they can afford. Proper income and expenditure assessments will also be carried out to agree what can be paid and over what period.
According to recent research from the Money Advice Trust, the use of bailiffs to collect debts owed to local authorities in England and Wales has jumped 14 percent in two years.
Councillor Max Schmid, H&F cabinet member for finance, said: “Heavy handed debt collection in the public sector is counter productive: Court action, bailiffs and lawyers all cost money, and can create high levels of stress and anxiety in families that find themselves in debt.
“We are determined to offer an ethical approach to debt management that both helps residents at risk of falling into debt and saves money for taxpayers at a time of massive funding cuts from central government.”
Eddie Nott, UK managing director of 1st Credit, said it’s time public sector debt collection changed: “With an organisation the size of H&F there is enormous scope to set up a system of ethical debt collection that increases efficiencies, raises funds for the council to reinvest in local services and protects its residents from the negative effects of debt.”