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£15K Debt Collection from a City Council

Advocate has collected a £15K debt in 5 working days from a City Council. The payment was essential to the ongoing provision of educational support services during term time. Our client is a small company having a big impact on the children and families they assist on behalf of the City Council. Whilst our client has been trading for five years, their teaching model is a descendent from The Head Start Programme of 1965. Head Start was a product of America’s Great Society campaign to help support disadvantaged children and their families. Despite the model being integrated and adapted by most first world countries over the last 50 years, the fundamental principles of effective communication and positive behaviours as a societal ambition remain largely unchanged.

Our client is one of many private companies providing behavioural and speech services to support children and their families, much like Head Start. They focus on providing personalised sessions in local schools. It is standard practice for our client to invoice the cost of each term in advance on 30-day terms. They should receive funding before the term starts. Having traded with this City Council previously, our client was aware of their Payment Policy and thought they knew what to expect.

Government Payment Policy

The Government Prompt Payment Policy announced in 2015 set targets for paying government/council suppliers. It mandates 95% of all undisputed debts should be received by small firms (such as our client) within 5 days of invoice and 100% within 30 days. There are of course exceptions to every target and rule because things inevitably go wrong. When Advocate was instructed the debt was already 51 days from the invoice issue date.

Curve Ball

Over the years, Advocate Debt Collection has successfully recovered payment from a number of councils. They tend to be just as eager to find a quick resolution. The Prompt Payment Policy is having a positive impact. On occasion, we do get a curveball when trying to recover a debt. Some are simpler than they first appear. Others can be quite alarming as in this case. Our dialogue identified two issues the client had not been aware of 1) due to council restructuring the new stakeholder had only just been appointed, 2) funding had not been approved despite our client providing the services for a number of weeks already. Our client had already spent time and resources providing support services that unbeknown to them were not signed off. Providing support free of charge was not a financially viable option. Withdrawing service resulting in the children and families being abandoned was not a morally acceptable alternative.

A+ for Effort

Advocate politely reminded the debtor of the Prompt Payment Policy which makes no exemption for restructuring or miscommunication. We also emphasised the financial and moral predicament our client found themselves in. On day 2 of our instruction, the City Council initiated internal escalation before issuing a BACS remittance. Payment of the client’s £15K was received on the 5th working day of our instruction. Advocate’s fees were paid shortly after. Our client now has a dedicated point of contact for invoicing with the next 2 terms of approval expected ahead of time. Following over 18 months of interrupted teaching owing to the pandemic, our client is seeing first-hand the resilience and determination of the education community. Another successful debt recovery by Advocate.

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