Purpose

This report seeks to award the appointment of
between two and five enforcement agencies, and potentially one
or
Two debt collection agencies.

Content

RESOLVED:
To approve the award
of contracts to a total of six (6) suppliers (and for a period of
four (4) years in each case) based on the final evaluation scores
for the collection of outstanding Penalty Charge Notice debt.
 
Reasons For
Decision
 
Certificated Enforcement Agents play a crucial
role in recovering unpaid debts arising from Parking Penalty Charge
Notices issued under the Traffic Management Act 2004, the London
Local Authorities Act 1996, and the Transport for London and London
Local Authorities Act 2003. Each type of debt - whether arising
from parking, bus lanes, or moving traffic contraventions - follows
a distinct statutory process. This includes a sequence of notices,
which may be served by hand, affixed to vehicles, or delivered by
post, all intended to prompt payment or facilitate the timely
discharge of liability.
 
Should debtors fail to discharge liability or
settle outstanding debts, the Council follows a process of
registering outstanding debt at the County Court in advance of
issuing warrants to Certified Enforcement Agents in order to
collect debts on the Council’s behalf. Enforcement Agents
recover debts in accordance with the Taking Control of Goods
Regulations 2013 (as amended) and the associated fee structure set
out in the Taking Control of Goods (Fees) Regulations 2014. When a
debt is successfully recovered, the enforcement company remits the
amount owed to the local authority and retains the applicable fees
to cover the costs of delivering the service.
 
The Council’s current contract with
Enforcement Agencies expired in October 2025. As with the previous
contract transition in 2020, it is anticipated that Hackney Council
will suspend the allocation of new warrants for a period of two
months prior to the commencement of the new contract. This will
help ensure a smooth transition between service providers.
 
The two-month suspension of warrant allocation
is not expected to have any detrimental impact on the service. On
the contrary, it will provide Parking Services with valuable time
to support the mobilisation of the new contract. During this
period, customer enquiries related to enforcement are likely to
decrease, as no active enforcement will be taking place.
Additionally, the backlog of warrants will enable new contractors
to begin the competitive period with an increased volume of cases,
supporting early performance assessment and service continuity.
 
As the fees charged by Enforcement Agents are
strictly regulated under the Taking Control of Goods Regulations
2013, enforcement firms are unable to submit financially
competitive bids in the traditional sense. Consequently, officers
have reviewed the current contractual model and identified the need
for a revised approach that places greater emphasis on the added
value that providers can deliver to the Council - such as community
benefits, innovation, performance, and social value.
 
It is expected that the core service offerings
from Certificated Enforcement Agent firms will be broadly
comparable, as most have an established presence in the market and
significant experience in recovering local authority parking and
traffic debt. As a result, it is anticipated that the
distinguishing factor between bidders will be the “added
value” elements they bring - such as community engagement,
innovation, social value commitments, and customer service
enhancements.
 
The previous contract (2020–2025)
operates on a tiered model comprising one Primary Enforcement Agent
and three Secondary Enforcement Agents. Under this arrangement, the
Primary Enforcement Agent is given first refusal on all warrants -
excluding those related to persistent evaders - provided they
maintain agreed performance standards. Warrants that are either
declined or returned as unrecoverable are redistributed to the
Secondary Enforcement Agents, with allocations based on their
relative performance. If the Primary Enforcement Agent fails to
meet performance targets, the Council is reimbursed for the
associated debt registration fee, currently £10 per case.
 
For the new contract, this model will be
replaced with a performance-based competitive allocation system, as
detailed in the technical specification. This approach is designed
to drive continuous improvement and ensure fairer distribution of
work based on results.
 
The proposed new model introduces a
performance-based competitive approach, where multiple enforcement
agencies will compete for work. This is expected to drive higher
levels of performance, increase recovery rates, and improve
remittances to the Council, ultimately securing greater income and
service value.
 
Alternative Options
Considered and Rejected
 
1.  Insourcing:
1.1 Parking Services are fully regulated and
enforced under the Traffic Management Act 2004 (as amended), along
with other relevant legislation. This outlines the statutory
process for the issuance of parking Penalty Charge Notices (PCN)
and the relevant debt recovery process. The last stage of the
enforcement process is the issuance of Warrants of Controls to
Enforcement Agents, which is provided by third-party suppliers.
 
1.2  Enforcement
Agents work and the fees are regulated by the Taking Control of
Goods Act 2013 (as amended), and the main scope of work is to
identify debtors and collect outstanding debt.
 
1.3  In the past 6
financial years, the average debt owed by debtors in Hackney has
been 30%. The remaining 70% is for debtors outside of Hackney, some
being as far as Scotland, Liverpool and Manchester. Also, a number
of vehicles that are registered in Hackney are not at the address
provided at the DVLA, so it is difficult to clamp or remove the
vehicles if the debt is unpaid
 

Fin. Year

Total Warrants

Warrants Paid

Warrants Income

Hackney Warrants

%
of Hackney

2019-20

26,980

4,453

£874,661

8,017

29.71%

2020-21

40,836

5,567

£1,127,153

12,427

30.43%

2021-22

82,796

6,915

£1,417,575

24,270

29.31%

2022-23

70,994

7,654

£1,569,070

22,370

31.51%

2023-24

68,101

5,409

£1,108,845

18,465

27.14%

2024-25

30,181

3,805

£992,008

7,776

25.76%

 
1.4  Based on the
above, it is not financially viable to in-source the services of an
Enforcement Agent (EA) as EAs normally work on a self-employed
basis and charge approximately £70-90k per annum. Along with
vehicles, removal trucks, and back office processing, the in-house
EA operation would cost approximately £500k to run based on a
direct comparison to our in-house enforcement operation. This would
reduce the generated income by over 50% from the current levels of
recovery (£1m in 2023-24). Therefore, it is recommended that
the service continues to be outsourced and provided at no cost to
the Council to ensure best value for money and the highest possible
recovery rate.