Re: Grimsby Magistrates’ court abetting North East Lincolnshire Council Fraud

Consequences of the benefit reforms have added substantially to evidence already obtained in

support of North East Lincolnshire Council unlawfully profiting from costs raised in the Magistrates

Court for enforcing alleged council tax debt.

Revenue through Magistrates’ court costs is being generated well in excess of that incurred by the

authority in bringing the case before the court. Surplus income generated is being used to meet

expenditure in its general administration.

It comes in the light of the High Court ruling against Barnet Borough Council which had budgeted

for a surplus of income from residential parking schemes to be used to meet other transport

expenditure. There are similarities between this and how North East Lincolnshire Council is using

income generated from court penalties to pay for administering Council Tax.

Please see attached judgment: Attfield, R (on the application of) v London Borough of Barnet

[2013] EWHC 2089 (Admin) (22 July 2013)

Regulations which came into force earlier this year including changes to the way Council Tax

benefit is administered and the under-occupancy penalty (the ‘bedroom tax’) have predictably seen

numbers unable to meet council tax payments escalate. The council therefore has the option to

seek court orders in those cases to enforce payment and claim court costs. As a consequence the

revenue, already massively in excess of what the law permits (see attached ref, Total Cost of CT

Admin.pdf) is estimated to have increased by around 67 per cent.

This highlights, that already disproportionately high applications to the court are increasing to

unprecedented levels and if Magistrates continue awarding unrevised costs in respect of

each individual, they will most certainly be guilty of abetting the council’s profiteering.

Data obtained from North East Lincolnshire Council reveals that despite the reforms drastically

increasing prosecutions, the authority continued applying £70 costs for each account summonsed.

In terms of income, according to figures disclosed, costs raised between the months May to

August, in 2012 were a third of a million pounds, whilst for the same months subsequent to the

reforms the figure increased by 67% to over half a million. If like the law dictates, costs were in line

with expenditure "reasonably incurred" before benefit changes, then the majority of the revenue

raised above this must be considered improper gains if the £223k surplus goes to fund Council Tax

administration.

However, the amount of costs is not the only issue. Unlike most councils which charge summons

and liability order costs in line with the law, only a single inflated summons penalty is imposed. In a

2011 review (see attached ref, FOI costs letters.pdf), NELC made the decision to front load liability

order costs to the summons having the overnight effect of increasing the penalty by 120%. It

appeared the council had been given free rein by the Magistrates' court to set its own levels which

when applied for at the hearing would be granted by the bench with no questions.

Evidently, measures to increase revenue through court costs had been taken well before the

reforms took their effects which themselves have added substantially to NELC costs raised

because of the staggering volume of new business put through court. If applications maintain a

level 67% higher than before reforms, the projected costs raised over a year would be £1.36

million, which compares with before the 2011 review at £0.575m. Viewed another way, the

council must have satisfied the court that it had incurred 137% more expenditure, with

the bench awarding these levels without so much as flinching.

The council attributes a substantial amount of expenditure to monitoring accounts in the run up to

issuing summonses. This however, is unwarranted because the process is automated so any

correspondence the defendant receives in connection with the authority's application to the

Magistrates' court will have been generated entirely as a consequence of parameters set on the

council tax software package. NELC has stated it has a £10 minimum amount that customers will

be summonsed for because a parameter is set for that amount in its council tax system. Evidence

that the procedure is automated is supported in the response to a freedom of information request

which revealed the council issued 82 court orders for debt of less than £10 between 2006 and

2011 including 45 for debt less than £5 and three for just one penny.

Grimsby Magistrates' court is as guilty as the council because although NELC may notify the

court of the costs it will apply for, it doesn't mean they're agreed in advance. When making an

order for costs, the court must be satisfied that the sum it orders has been reasonably incurred by

the council. Notifying the Court merely makes it aware of the level of costs that the Council would

request at the hearing. The power therefore, as to whether costs are awarded and to the level, is

always the Courts.

North East Lincolnshire Council has continued to request the same level of costs and stated that

"the courts have made no adjustment to the level of costs it awards" meaning Grimsby Magistrates’

Court has continued to award the costs, i.e. £70 as standard. It is therefore inconceivable that the

Magistrates court is performing its proper function if satisfied that the amount claimed by way of

costs is no more than that reasonably incurred by the authority when sums raised over the period

scrutinised are an average 67% higher than before the benefit reforms.

Comparing Court summons costs raised pre and post benefit reforms

2012/13 2013/14

summonses Costs raised summonses Costs raised

May 2,356 £164,920 3,080 £215,600

June 960 £67,200 2,702 £189,140

July 779 £54,530 1,164 £81,480

August 669 £46,830 1,000 £70,000

Totals 4,764 £333,480 7,946 £556,220

Please don’t hesitate to ask if you require any further evidence, legislation, sources of data etc., to

support that already provided in this letter and attachments.