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Efficiency savings worth at least £600,000 would be generated if Birmingham City Council discontinues the option of allowing Council Tax to be paid by the traditional payment booklet method.
Cabinet will be asked on September 1 to decide whether to make the change as one of two options being put forward to modernise the council's collection of Council Tax revenue.
The other proposed change would see the payment date via payment card - the suggested replacement for the traditional booklets - standardised as the 1st day of each month.
Aims and advantages of the two proposed changes, which would be implemented with effect from April 2009 are:
Encouraging take up of direct debit as an alternative payment method - customers paying this way are less likely to default on payments, thus allowing resources to be diverted into collection and recovery. The costs for the council at 1.5p per transaction (or 15p for a typical year) are also significantly lower than any other method.
Achieving efficiency savings of £600,000 over three years in printing and postage (timescale based on average life of new plastic payment cards).
Improved cash flow - collecting money on the 1st of the month rather than the 15th has a clear cash flow advantage in bringing forward the availability of funds to the city.
Commencement of recovery action for non-payment will be quickened - moving the date forward will allow the recovery process and, where necessary the enforcement process, to commence at an earlier stage.
The only location at which booklets are accepted but the new plastic cards are not are banks - but banks can levy a charge for such transactions, while this is not the case with direct debits. Those with bank accounts can very easily set up direct debits to pay their Council Tax bills, which would be to their advantage.
Cllr Paul Tilsley, Deputy Leader of Birmingham City Council, said: "We fully acknowledge that booklets are a traditional method of Council Tax payment for many households, but society and the way transactions are made has changed.
"By standardising our payment date and replacing booklets, we stand to make huge efficiencies, which means much more money can be pumped into our services.
"The majority of people who still use booklets do so out of habit - most have bank accounts, so could use direct debit, which we are making as easy as possible by giving the option of paying on the 8th, 15th, 21st or 28th of the month. Payments will also continue to be possible via the new cards at all existing designated locations including Post Offices and PayPoint and Payzone outlets as well as at our offices throughout the city, including the main site at Waterloo Street in the city centre.
"Other cities have reaped the benefits of moving to this model, and it is only right that we make our revenue collection system one that is modern, efficient and in the best interests of the city." |
