What’s Going On?
The traditional payment recovery process burdens companies with high collection, legal, and administrative costs, often passed to consumers via higher bills. This exacerbates financial hardship for struggling customers, perpetuating a debt cycle and increasing legal risks. The current system escalates issues rather than providing sustainable, effective solutions.
Raimac’s programmable payment solution empowers consumers with flexible, automated, and personalised payment options, improving repayment success, reducing collection costs, and lowering utility bills. This boosts customer satisfaction, trust, and enhances utility companies’ public image, shifting from punitive to proactive, sustainable models.
CEO Frazer MacRae highlights the challenge, critiques current approaches, and advocates for a fairer, customer-friendly repayment journey.
The Scale of the Challenge
Local authorities across the UK are under intense pressure to collect revenue to fund essential services. Council tax arrears alone now exceed £5 billion in England, with the annual shortfall growing year on year.
Parking fines and penalty charge notices also represent significant revenue for councils. While smaller in absolute value than council tax, these fines are highly visible and politically sensitive because they can disproportionately impact those on lower incomes.
Every pound not collected is funding unavailable for social care, education, housing, and transport improvements. Councils cannot afford to ignore arrears but how they choose to recover them is crucial.
The Traditional Debt Collection Model
Most councils use a combination of in-house billing and external debt collection agencies or enforcement agents to pursue unpaid council tax and fines.
The typical journey looks like this:
- Bill issued
- Reminder or final notice sent
- Liability order sought in court
- Enforcement action via external agents
Enforcement agents can visit debtors’ homes, seize goods, and add significant fees to the original debt. For parking fines, similar processes apply, escalating from letters to warrants of control.
While this model is legal and well established, it is also adversarial and costly, both financially and socially.
Complaints and Concerns
The Local Government and Social Care Ombudsman receives hundreds of complaints every year about councils’ use of debt collection and enforcement. Common themes include:
- Failure to offer affordable repayment plans before enforcement
- Poor communication and inflexible processes
- Excessive or unclear fees added by enforcement agents
- Aggressive or intimidating behaviour during visits
Residents often object not to paying what they owe but to the way they are treated in the process.
Research by Citizens Advice and other charities shows that vulnerable people, including those with disabilities, mental health challenges, or low incomes, are often hardest hit by enforcement approaches.
Even when councils follow the letter of the law, the spirit of fairness can be lost. That damages trust and makes future engagement harder.
The Cost of Heavy-Handed Recovery
Beyond reputational damage, aggressive recovery tactics can cost councils more over time.
- High operational costs for enforcement contracts and bailiff fees
- Increased write-offs when residents disengage or move away
- Reduced voluntary compliance when the system feels unfair
- Wasted staff time managing disputes and complaints
- Emotional harm to vulnerable residents who need support
The old model is a blunt tool for a complex, human problem. It drives some repayments but at a cost to long-term relationships and overall recovery rates.
The Need for a Fairer, Smarter Approach
Modern councils want to balance the books without pushing people further into crisis. This means moving away from an “enforcement first” approach towards “engagement first” strategies.
Key principles include:
- Early intervention before arrears spiral
- Clear communication without threats or jargon
- Flexible repayment options tailored to circumstances
- Transparency and consent, giving people choice and control
- Compliance with fairness principles and consumer duty expectations
Many councils recognise the need to change but face challenges from legacy systems, fragmented processes, and limited resources.
Introducing Programmable Payments for Local Authorities
At Raimac, we have developed a programmable payments platform designed to help councils modernise the way they recover debts.
It gives residents the power to set up structured, affordable payment plans online, choosing the amount, frequency, and start date within council-defined limits.
Here is how it works:
John owes £380 to water company from a quarterly bill at his new rental home. He can’t afford to pay this in one lump sum and doesn’t have time to call the water company helpline. He’s also been avoiding calls to make payment.
As the water company supports Raimac programmable payments, he logs onto his water account and chooses to pay £80 now on his card and £100 when he get paid on 5th for next 3 months. He’s paid his bill on his terms and the water company saves money to recover the debt.
No bailiffs. No threats. Just a clear, structured repayment path that residents can manage on their own terms.
Benefits for Councils and Residents
Programmable payments do not just improve the experience. They deliver real, measurable benefits:
- Higher repayment rates as residents are more willing to engage
- Lower operational costs by reducing enforcement and call centre demand
- Fewer complaints about aggressive collection practices
- Improved cash flow through predictable, automated payments
- Clear audit trails for regulatory compliance and reporting
- Stronger resident relationships built on trust and transparency
This approach allows councils to recover more for essential services while protecting their reputation as fair, resident-focused organisations.
Meeting Modern Expectations
Communities expect their councils to act with integrity, fairness, and compassion.
Enforcing council tax or parking fines through bailiff visits and threatening letters does not sit comfortably with those values.
By adopting programmable payments, councils can demonstrate a genuine commitment to treating residents with respect, even when discussing difficult issues like debt.
Why Now?
The cost-of-living crisis is putting huge pressure on households. Many people who owe council tax or fines are not refusing to pay but simply cannot pay in one lump sum.
Offering fair, flexible repayment plans is both ethical and financially smart.
Regulators, ombudsmen, and the public all expect councils to modernise their approach. Doing nothing is no longer an option.
In Conclusion…
Local authorities face tough choices. They must collect what is owed to fund essential services while protecting vulnerable residents and maintaining public trust.
The traditional, enforcement-heavy model is failing too many people and costing councils in complaints, costs, and lost goodwill.
It is time for change.
At Raimac, we believe programmable payments offer a better way forward. A way to recover debts fairly, efficiently, and in line with the values councils hold dear.
If you would like to learn more or see how programmable payments could work for your council, get in touch today. Let us build a fairer, more effective approach to debt recovery together.
