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PRESS RELEASE

6 November 2008

PR/02/08/09

PAC Report Highlights increase in rate arrears

Rates arrears rose by over 100% in the years between 2006-08 a critical report has found. The report, by the Public Accounts Committee and published today, investigated the collection of rates by the then Rates Collection Agency.

Committee Chairperson, Paul Maskey MLA, said, “The core business of the Rate Collection Agency was, as the name suggested, recovering rates. I therefore find it difficult to understand the decision taken to defer recovery of arrears, given its effect on public finances. As a direct result, arrears rose from £48 million in 2006 to £124 million by 2008.”

The Committee found that the Department of Finance and Personnel (DFP) and the Agency were trying to do too much in too short a timescale. Until 2007, rates were based on historic rental values; from April 2007 they were based on estimated selling price. The newly installed computer system was based on this new policy and significant flaws, which led to additional costs, were incurred.

Commenting on these failures, the Chairperson said, “We accept that the Department was successful in ensuring that bills were processed on time. However, a very high price was paid for this success. We have found that the implementation of the new IT system was very poorly managed. We were amazed to learn that shortcuts were taken.

“Transferring experienced staff from operational duties to working on the implementation of the IT system may have enabled the system to go live but it also resulted in customer service being sacrificed. The poor service and administrative backlogs which also resulted cannot be tolerated in services provided by the public sector.

In addition, we found that revenue loss from vacant properties, increased cost of arrears recovery and the estimated doubling of irrecoverable arrears from £2 million to £4 million will translate into less money for Councils to spend on services. We think that it is intolerable that Councils will have to ‘pick up the tab’ for systemic failure in a central government agency.”

The Committee also found that the additional challenge of setting-up a new Agency, Land and Property Services and preparing for the inclusion of Ordnance Survey and Land Registers from 1 April 2008 complicated an already complex operation.

The Committee is of the view that a properly considered risk assessment would have avoided many of the problems noted in this report by postponing the reforms for one year.

ENDS

Notes to Editors

The PAC Committee members are:-

Alliance

Mr Trevor Lunn

Democratic Unionist Party

Mr Jim Shannon 6

 

Mr Jonathan Craig

 

Mr George Robinson 7

 

Mr Jim Wells 3,4,5

Sinn Fein

Mr Paul Maskey (Chairperson) 2

 

Mr Mitchel McLaughlin

Social Democratic and Labour Party

Mr John Dallat

 

Mr Thomas Burns 1

Ulster Unionist Party

Mr Roy Beggs (Deputy Chairperson)

Progressive Unionist Party

Ms Dawn Purvis

1 With effect from 04 March 2008 Mr Thomas Burns replaced Mr Patsy McGlone.
2 With effect from 20 May 2008 Mr Paul Maskey replaced Mr John O'Dowd.
3 With effect from 1 October 2007 Mr Mickey Brady replaced Mr Willie Clarke.
4 With effect from 21 January 2008 Mr Ian McCrea replaced Mr Mickey Brady.
5 With effect from Tuesday 27 May 08 Mr Jim Wells replaced Mr Ian McCrea.

6 With effect from Monday, 15 September 08 Mr Shannon replaced Mr David Hilditch.

7 With effect from Monday, 15 September 08 Mr Robinson replaced Mr Simon Hamilton

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