Southwark Council’s Lib Dem administration has decided to take the borough’s council tax collection service back in-house just a year after extending its agreement with private contractor Liberata. Southwark Labour councillors argued in February 2008 that the council should sack Liberata and consider taking the tax collection back in-house because the borough currently loses over £5 million a year in uncollected council tax. But at that time the Lib Dem administration decided to stick with Liberata until at least 2011 because the company offered the council an £800 thousand discount on the continued service.

Southwark Council is the most ineffective council tax collector in London under the Liberata contract and third worst in the country.

Southwark Labour’s Resources spokesman Cllr Richard Livingstone said:

“The staggering ineffectiveness of Liberata means that every year they are responsible for council tax collection in Southwark over £5 million goes uncollected. That means that council tax is higher for everyone who does pay and the council has less money to spend on frontline services.

“The Lib Dem administration is wholly responsible for the extension of the contract with Liberata that leaves us lumbered with the company until 2011. Their decision last year, when Labour argued for the council to sack Liberata, was an act of the most appalling financial mismanagement. This u-turn is a welcome change in policy, but it comes a year too late for Southwark council tax payers”

NOTES

Southwark’s Lib Dem/Tory executive decided to extend the Revenue and Benefits contract with Liberata at Council Assembly on 20^th May last year. Labour proposed an amendment to explore taking the service back in-house

Lambeth’s collection rate in 2008/09 was 94.2% and Lewisham’s was 93%. So if Southwark achieved Lambeth's levels, it would be receiving £2.35m extra per year.

In 2008/09, one percentage point of uncollected tax was worth £940,420 in lost revenue. 

The average council tax collection rate in England is 97%