TV licence enforcement review

 CAP’s official response to the Department for Culture, Media & Sport’s review of TV licence enforcement Christians Against Poverty (CAP) is pleased to contribute to the Department of Culture, Media & Sport’s review of TV Licence Enforcement. We agree that there needs to be an effective deterrent for evasion, but it is imperative that the TV Licence Enforcement regime also responds appropriately and fairly in the event of non-­‐payment. Over the last 19 years working with clients in financial difficulty, we have gained experience of the various enforcement regimes used for different debts. We believe that decriminalising TV licence offences is the right move, but that careful consideration needs to be given to shaping any civil alternative. From the options presented in the consultation document, in our opinion using a civil debt is the most appropriate enforcement regime and goes the furthest to satisfy the key criteria set out in the review. The context for this is that for many people a TV licence is essential for social inclusion, and in particular provides a cheap form of entertainment for those on low incomes. However, many of the people we work with are struggling to pay essential living costs, such as rent and food. They are often overwhelmed by financial difficulty and other tough personal circumstances. One client for example, admitted the offence of using a TV without a licence when taken to court. However, this was due to it not being at the forefront of her mind when struggling to manage her finances after her partner had left when their third child was born with a severe disability. In these situations it is easy to see how paying for their TV licence slips down the priority list. The potential for court action as a deterrent for evasion remains when using a civil debt, but would offer scope for a more appropriate level of penalty for those who are not deliberately evading. This option would also allow for more flexibility around repayment arrangements, and channels to support people with extra vulnerabilities. How this will be done in practice are important considerations as the new regime is developed. Using our experience to form our view of the best policy option, below we have provided answers to applicable questions to aid you in the review process. Matt Barlow UK Chief Executive Christians Against Poverty (CAP) helps thousands of individuals and families struggling with unmanageable debt each year. Through our network of 280 CAP Debt Centres based in local churches, CAP offers a free face-­‐to-­‐face d ebt management service, with advice and on-­‐going support provided from Head Office. In 2014 CAP worked with 12,295 households, with 2,534 of these clients becoming debt free in the year. In addition to this, CAP is the largest provider of face-­‐to-­‐face adult financial education in the UK. There are currently 879 CAP Money Churches providing a three-­‐week money management course, equipping 12,000 people each year to budget, save and spend wisely. CAP has also recently expanded to tackle the causes of poverty. To this end, CAP now operates 115 CAP Job Clubs and is piloting 26 CAP Release Groups to tackle unemployment and dependencies. Christians Against Poverty | Jubilee Mill, North Street, Bradford, BD1 4EW | 01274 760720 | info@capuk.org | capuk.org 2 CAP’s official response to the Department for Culture, Media & Sport’s review of TV licence enforcement TV Licence Enforcement Review -­‐ policy options: 1) Do nothing: Question 1 – Do you think failure to hold a TV licence when one is needed should remain a criminal offence? Christians Against Poverty (CAP) does not believe that failure to hold a TV licence, when one is needed, should remain a criminal offence. In our opinion, the current regime is completely disproportionate to the level of offence, and penalises people on low incomes and with vulnerabilities. Question 2 – What are the advantages and disadvantages of the current system? While it is undeniable that the current system effectively communicates a level of seriousness and has a high recovery rate, CAP does not believe this is a justification for it to remain a criminal offence. The enforcement activity carried out by TV Licensing before considering a prosecution is a strength of the current system, particularly the visit from a ‘visiting officer’. This enables a more accurate assessment of individual circumstances before further enforcement is considered. However, the current system does not give enough flexibility to show appropriate forbearance to those in financial difficulty. For most people, financial difficulty is triggered by income shocks that accompany challenging life events, such as ill health or unemployment. While the current system may exhaust all other routes before pursuing prosecution, in CAP’s experience people are often so overwhelmed by other problems in their lives and the mess their finances are in that they are not opening letters or answering the door. In addition, considering that 67% of CAP’s clients had sacrificed meals and 60% were fearful of losing their home before our help, it is not surprising that when struggling to keep up with essential expenditures it is the TV licence that goes unpaid, initial enforcement activity goes unanswered, and that defendants cannot afford to quickly make a payment to stop further enforcement. In these situations there is not a deliberate intent to evade, but it is likely that enforcement activity will be escalated to the Magistrates Court. Therefore, the current system does not act with proportionality. Furthermore, the current system also requires people to understand the Magistrates Court system and to represent themselves. Being summoned to court is intimidating, and in our experience often defendants do not know how to convey their financial situation and personal circumstances in this context. When CAP is helping a client to manage their debts, we are able to explain the court process and importance of attending the hearing. We also provide them with details of their income and expenditure to take to their hearing to demonstrate how much they can reasonably afford to pay. Our concern is that in general people do not have this support and, if as a result they do not turn up for the hearing, the fine is due immediately and it is likely enforcement agents will be sent in. All of these issues are intensified when considering the additional vulnerability of some defendants. Amongst our client base there is a huge range of key support issues that make it especially difficult for people to manage their finances and respond to enforcement action. The current regime does not accommodate the extra support these clients need, for instance it is difficult to get through to a staff member when phoning the helpline. Christians Against Poverty | Jubilee Mill, North Street, Bradford, BD1 4EW | 01274 760720 | info@capuk.org | capuk.org 3 CAP’s official response to the Department for Culture, Media & Sport’s review of TV licence enforcement Overall, we believe that using the Magistrates Court is a substantial disadvantage of the current system. This is intensified by this route being the only option available for those in financial distress who cannot afford to make a payment before things have escalated. Question 3 – To what degree do you think the current system delivers against the key criteria for this review (as set out in the terms of reference at Annex A)? As the consultation document details, although the current system may be effective at deterring evasion, it does not offer value for money or ease of enforcement. It is also definitely not easy to understand, proportional or fair to all licence payers. CAP considers there to be alternative options that would meet the other criteria to a greater extent, that could be equally effective as the current regime in terms of enforcement. 2) Reform current system: Question 6 – We would welcome suggestions on whether and how the current criminal enforcement system could be improved. Although CAP considers it necessary for the current regime to be replaced, we would like to offer some suggestions to make the system fairer and more appropriate if the criminal enforcement system is retained after the review. We would suggest that some of these are also important considerations when developing decriminalised alternative regimes too. o Greater clarity of what to do if you cannot afford to renew your TV licence: Efficiency could be improved by providing clearer instructions on how to declare that a TV licence is not required. It would also be helpful to clarify how it can be demonstrated that it is not being used to watch live broadcasting, as it is unreasonable to expect an individual to get rid of their TV if they are only unable to afford a TV licence for a temporary period. This is also an important consideration for some of the alternative options where the burden of proof is shifted onto the suspected evader. o There should be no requirement to buy a new TV licence as part of penalty: For some people paying for a new TV licence, even through instalments, will be unaffordable. To accommodate this there should a choice whether to declare that a TV licence is not required and they will no longer watch live broadcasting, or to purchase a new TV licence. This would reduce the risk an evader remains unlicensed, without inflicting unreasonable financial burdens on those in financial difficulty. o TV licence fines should be included in insolvency: Court fines cannot be cleared through insolvency. This is detrimental for some of our clients who cannot afford to repay their debt and are trapped with severely restricted living standards. As insolvency options have restrictions in place to ensure that irresponsible financial behaviour is penalised, CAP believes it would be appropriate and reasonable for TV licence fines to be cleared in insolvency when circumstances mean clients are unable to pay them due to wider financial difficulty. o Repayment in instalments: As highlighted in the response to question two, some defendants will have evaded due to financial difficulty. In many cases, they will not be able to pay the penalty or purchase a TV licence immediately due to having inadequate funds. In CAP’s experience most defendants in this situation do want to repay their debts, but often Christians Against Poverty | Jubilee Mill, North Street, Bradford, BD1 4EW | 01274 760720 | info@capuk.org | capuk.org 4 CAP’s official response to the Department for Culture, Media & Sport’s review of TV licence enforcement require extended timescales to allow them to do so. It would be beneficial for any regime to provide an option to pay any penalties by instalments, without restricting this to within 28 days or two months as some of the alternative options suggest. On average the clients CAP is supporting to repay their debts take four years to do so. Having a system that allows defendants to do this through affordable instalments reduces the burden on those who are struggling financially and increases the chance of recovering unpaid fees. Question 7 – What are the advantages and disadvantages of this option? Question 8 – To what degree do you think this option delivers against the key criteria for this Review (as set out in the terms of reference at Annex A)? Despite the advantage that some of the concerns raised in answer to questions two and three could be addressed through improvements, CAP does not consider any potential improvements to the current criminal enforcement system substantial enough to properly address the inadequacies of the current system. 3) Out of Court Settlement: Question 11 – What are the advantages and disadvantages of this option? Question 12 – To what degree do you think this option delivers against the key criteria for this Review (as set out in the terms of reference at Annex A)? The main advantage of this option is that there is an alternative to prosecution. However, if a person wishes to dispute their liability, is unable to pay, or fails to understand how to react to the demands, they will still end up in the Magistrates Court. Therefore, this system is still weighted against those in financial difficulty, complex and disproportionate. Furthermore, CAP believes this system would not meet the fairness criteria. As a person’s means are not assessed with an out-­‐of-­‐court settlement, so those on low income would be particularly impacted by this system. It is also concerning that there may be lower evidence requirements for out-­‐of-­‐court penalties to be issued, meaning that more mistakes will be made, adversely impacting those who have not evaded. Additionally, we agree it is essential to offer payment by instalments for any penalty and this is an improvement on the current regime. However, if Scotland’s 28 days is used as a benchmark this will be ineffective. Please see answer to question six for more details. 4) Fixed monetary penalty: Question 16 – What are the advantages and disadvantages of this option? Question 17 – To what degree do you think this option delivers against the key criteria for this Review (as set out in the terms of reference at Annex A)? Despite using a civil penalty, similar concerns as raised in questions eleven and twelve remain if a fixed monetary penalty was to be used as means of disposal of the criminal offence. In particular, there is still potential under this system to proceed to a hearing at the Magistrates Court. Therefore, this regime is again weighted against those in financial difficulty, complex and disproportionate. Again CAP is concerned about the short time period that payment may be expected in, and that a person’s means will not be taken into account. This system would not offer enough Christians Against Poverty | Jubilee Mill, North Street, Bradford, BD1 4EW | 01274 760720 | info@capuk.org | capuk.org 5 CAP’s official response to the Department for Culture, Media & Sport’s review of TV licence enforcement forbearance to those in financial difficulty, especially if, as with Fixed Penalty Notices (FPN), payment is required within 21 days. Please see answer to question six for more details. 5) Civil monetary penalty: Question 21 – What are the advantages and disadvantages of this option? Question 22 – To what degree do you think this option delivers against the key criteria for this Review (as set out in the terms of reference at Annex A)? By replacing existing offences with a statutory requirement to have a TV licence, this option provides a more appropriate enforcement regime. In addition, it is an advantage that there is scope to appeal the penalty outside of court and that such fines can be cleared in insolvency. However, from our experience of existing civil monetary penalties, there is little good practice to base this model on. For instance, only being able to appeal up to a certain point, adding interest and charges and not being able to pay by instalments with only two months to make the payment. Again this option also imposes a penalty without assessing a person’s means to pay, and even more concerning is that the enforcement fees involved in such systems are exorbitant and can escalate debts very quickly. Therefore, overall CAP believes that this regime would still penalise those on low income and in financial difficulty, and would not include the flexibility needed to show them adequate forbearance and sensitivity to vulnerable defendants. 6) Civil debt: Question 26 – What are the advantages and disadvantages of this option? Question 27 – To what degree do you think this option delivers against the key criteria for this Review (as set out in the terms of reference at Annex A)? To meet the proportionality criteria, CAP believes TV licence offences should be decriminalised. By treating unpaid licence fees as a civil debt, we feel that option six is the most appropriate, fair and cost effective alternative enforcement regime to go alongside this change. This option would significantly reduce the financial burden on those who evade due to financial difficulty, but balances this with a requirement to pay for the period they’re liable for TV licencing. Additionally, there is a lot of good practice from the consumer credit industry that could be used to inform fair collections activity, in particular offering affordable repayment plans and recognising vulnerable customers. In addition, there are still enforcement options available where necessary to ensure there is an effective deterrent, and people do not evade their responsibly to pay when they can, but money is not wasted taking those who can not pay straight away to court. We believe it is fair that this option gives adequate opportunity for people to dispute the debt or accept their liability and arrange payment before court action and enforcement agent fees are incurred. From the consultation documents it is unclear what this option would look like in practice. It is important to highlight that if unpaid licence fees were liable for statutory interest and charges, monetary penalties could escalate quickly and become unaffordable. While we appreciate interest and charges act as an imperative to pay on time, consideration needs to be given to how forbearance will be shown; including the use of interest concessions where appropriate. Christians Against Poverty | Jubilee Mill, North Street, Bradford, BD1 4EW | 01274 760720 | info@capuk.org | capuk.org 6 CAP’s official response to the Department for Culture, Media & Sport’s review of TV licence enforcement The consultation document also suggests that the level of proof required before issuing a penalty is diminished, and the burden of proof is shifted onto the individual to prove that they did not evade during an assumed period. If this is the case, clearer guidance needs to be given about how to demonstrate that a licence was not necessary, to reduce unfair penalties and facilitate quick and easy disputes. To this end, perhaps it would be beneficial to keep the visiting officer role as part of the regime. On a final note, by treating TV licence fees as a civil debt we assume that any court action that results would be through the County Court. However, the consultation document does not make this clear, and mentions features associated with the Magistrates Court. CAP believes using the County Court is most appropriate for this type of debt, and TV licence fee debts should not be classed as a priority debt, and treated in the same way as Council Tax for example. Question 34 – Under a civil system of enforcement, a civil debt may impact upon an individual’s credit rating, which is not the case under a criminal system. We would welcome views and evidence on whether this is more or less appropriate than the penalties under the current system of enforcement. In CAP’s opinion impacting an individual’s credit file is more appropriate than using a criminal enforcement system. The vast majority of clients in financial difficulty, that we are concerned the current system deals with disproportionately, already have defaults or arrears on their credit file. Furthermore, as a record of an individuals credit history and maintenance of payment commitments, we do not feel that it is inappropriate for non-­‐
payment of TV licence fees to impact credit ratings. However, it is important that non-­‐
payment is only recorded on the credit file when it has been determined with certainty that an individual is liable for the unpaid fee. Christians Against Poverty | Jubilee Mill, North Street, Bradford, BD1 4EW | 01274 760720 | info@capuk.org | capuk.org 7 CAP’s official response to the Department for Culture, Media & Sport’s review of TV licence enforcement Requests for further information This response has been written by Rachel Gregory, External Relations Analyst for Christians Against Poverty, with contributions from: Dawn Stobart, Director of Debt Management and External Relations Mark Anchen, Creditor Liaison Manager Angela Gill, Senior Court Action Adviser Kevin Zhang, Senior Court Action Adviser For queries and to request further information please contact: Rachel Gregory External Relations Analyst rachelgregory@capuk.org 01274 760 589 Disclaimer: Although care is taken to ensure that this information is
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