Residents face credit card surcharge

RESIDENTS who pay bills such as council tax by credit card are facing a new surcharge as a local authority looks to make savings.

Hartlepool residents may be asked to pay a 1.8 per cent surcharge to cover processing transactions for credit card payments in a bid to save the council £13,000.

Finance chiefs argue that it is common practice in the private sector to levy a surcharge when people pay bills that way.

Hartlepool Borough Council is faced with slashing £20m from its £90m budget over the next four years with the loss of 150 jobs, community buildings and reduced services.

The latest recommendations under the Business Transformation Programme, which aims to streamline services, were proposed by the revenues and benefits team, which needs to make budget savings of £108,000.

Since 2002-03 the council has accepted debit and credit card payments and the cost of processing transactions has been absorbed by the local authority.

But the number of people paying by card has grown and in 2009-10 there were 2,500 credit card payments out of a total of 11,000 payments by card.

The total transaction charges absorbed by the council, which is 19p for a debit card transaction and 1.8 per cent of the transaction value for a credit card, last year were £19,790.

Councillors sitting on the cabinet committee heard that other councils have introduced a surcharge. Hartlepool, however, would be the first in the Tees Valley.

Labour councillor Ged Hall said it was a “last resort” by many families to use a credit card to pay for big bills such as council tax and he did not think it was a good idea to pass on the fee.

But Mayor Stuart Drummond said: “There seems to be a perception that people are using credit cards as a last resort but that is not always the case.

“If we are being charged for people using them, then that should be passed on. Most other private businesses do it.

“One point eight per cent is quite low and I don’t see the problem with it.”

The surcharge is expected to be introduced from April.

Labour councillor Jonathan Brash said the council has a good record of being “flexible” with people struggling to pay bills.

The scrutiny co-ordinating committee suggested the council either continues to absorb the cost or does not accept credit card payments.

Committee chair councillor Marjorie James (Labour) said the decision does not take into account middle income families who are already under financial pressure.

The remaining savings were achieved after a member of the benefits team took early retirement, saving £24,000 and a further £69,000 has been saved after the Intervention Visit programme, which saw officers visit claimants to confirm their financial circumstances, was scaled down.

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