£54K Debt Recovered on behalf of a Children’s Home

Advocate has successfully recovered £54K in less than seven days on behalf of a client who nurtures and inspires children and young people. Their mission is to give children without families or suitable homes a safe environment that prepares them for adulthood whilst facilitating a fulfilling childhood. Owing to the broad spectrum of skills and expertise required, it comes at a significant cost to the state coffers. This is no place for institutionalised production lines where the bottom line is more important than the person. Our client has maintained their SME status simply because the bespoke care needs of each and every individual on their books is not scalable. This choice brings with it cashflow limitations and meant carrying £54K over more than a few weeks quickly became an exponentially serious problem.

A Tale of Two Councils

The debt related to the final period of working with an individual who, after reaching the age where they could choose to be independent, decided to leave the care system and venture out into the world solo. After all, where better to make your own way than in one of London’s 32 boroughs? This particular borough could almost be perceived as two separate councils because it simultaneously features in the top 10% of deprived and wealthy communities in the UK. In accordance with the contract, once a person leaves our client’s care, there is a 28-day notice period from the end of the provision. This is because resources are booked and budgeted in advance. When the final month of service and notice period was invoiced, our client expected both fees to be paid in the usual time frame. However, the council pushed both invoices back, stopping short of elaborating on what the dispute might be.

Coming Home

With the £54K leaving a significant gap in cash flow, Advocate was instructed. We quickly engaged what could only be described as an uninformed and poorly coordinated accounts payable team. One could easily think of the £54K as a ball bouncing off the bumpers in a pinball machine. Persistence paid off, and a breakthrough came when we encountered the individual holding back payment. Their query related to why service provision was ending and why our client was seeking payment for the notice period. An epitome of efficiency, the client furnished us with an email trail between them and the council explaining the termination, justifying the notice period and referencing the contract on which the last few years of service provision had been based. Now we had identified the right contact, cause of non-payment and solution to the problem, the only task remaining was to make full payment. Recognising the urgency, a same-day payment for the £54K was received. Statutory late payment charges of £3.2K were uncontested in line with government policy and received on top of the £54K. Since this case, our client has another young person on their books courtesy of the same council, and we are informed payments are being made very promptly indeed!

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