Transforming the Council's approach to debt support
Could proactive outreach boost Council revenue and support vulnerable residents in debt?
Project brief
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Poverty and debt are significant issues in Barking and Dagenham, one of England’s most deprived local authorities. We estimate 6,000 households access 20,000 new loans each year which shockingly translates into repayments of around £16.7m for some of the poorest people in the country. Spiralling debt also leads to other poor outcomes such as mental health issues, domestic abuse, and homelessness.
​The pandemic exacerbated financial difficulties for many residents, leading to a surge in council tax arrears. Many customers were ignoring reminders to pay instead of engaging with the service, which is a common behavioural response to debt that people feel they cannot afford. In addition, a review of existing practices showed that the service only engaged with customers at crisis points, when their situation has severely escalated. Arrears need to be paid off but threatening people who cannot pay not only produces worse outcomes for those people but it also does nothing to improve council finances. This isn't an effective or sustainable approach to debt collection and so wanted to design a new preventative approach which uses data to to target early intervention.
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Team: Service designer (me), behavioural scientist, data scientist, and council tax, housing, and debt support service managers​​​​
Discovery process
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We conducted workshops with frontline staff and managers to understand current processes, identify gaps in service provision and identify opportunities for intervention. We developed archetypes of customers in arrears to develop a tailored intervention strategy - the 'can't pays' and 'won't pays'. And we analysed data to understand indicators that best identified vulnerable groups and what risks they might have.
Scoping workshop
Theory of change
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Local authorities have live data feeds on council tax, meaning we can see people falling into debt in real time. We can also see wider risks and vulnerabilities people might have, such as social care use, health issues, and benefits history. This could be leveraged to identify customers that might need support. Our new service aimed to proactively identify and assist customers in financial distress.
Our hypothesis was that
if we proactively contact customers and offer support
then it would improve outcomes for residents and enhance revenue collection for the council
We co-designed the new service with stakeholders including the process design, design of customer touchpoints such as text messages, emails, and phone call scripts, and set up of digital support systems such as the cohort identification platform, case recording system, and communication channels.
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New service implementation
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We piloted a new proactive outreach process, leveraging our predictive analytics platform, One View, to identify vulnerable residents and offering personalised support via text messages. Residents who opted in received assistance from our debt support service, the Homes and Money Hub, helping them set up affordable payment plans and access benefit support.
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We ran an RCT to test this new approach: the treatment group received the new outreach process and the control group flowed through the usual process. We tracked outcomes of both groups to measure the difference and guage impact of the pilot.
Impact
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​​The results of the pilot showed significant impact:
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Engagement: Over 26% of contacted residents engaged with the support offered, demonstrating the effectiveness of personalised outreach.
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Financial Benefits: Additional benefits totalling £400,000 were secured for residents in the treatment group, highlighting the impact of proactive support.
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Debt Repayment: Residents engaged in the proactive approach paid £75,000 more in arrears compared to the control group.
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Interventions: 127 support interventions were delivered to residents in the treatment group, significantly higher than the control group (chart below).
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Recovery Action Reduction: The approach led to a decrease in court and enforcement actions, benefiting both residents and the council.
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Interestingly, the data identified many residents that were not well known to the Council even though they were vulnerable. Often, they were eligible for support but did not know it and would not have received it in the absence of the pilot.
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“Client explained that this has lifted a weight off of her shoulders. She said that the support she has had has really helped as she was suffering with bad depression and was afraid to open any letters from the council but has now opened them all and has been trying to deal with them.“
- Frontline Officer
Future directions
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The success of the pilot underscores the potential for integrating proactive support into standard practice. By shifting focus from reactive to proactive interventions, we aim to further improve outcomes for vulnerable residents while optimising revenue collection for the council.
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In summary, the pilot has been a phenomenal success. It has demonstrated the power of data-driven, human-centred approaches in tackling debt and supporting residents in need, resulting in tangible benefits for both individuals and the community as a whole.​​