Recent data shows that struggling households owe a total of £6.6 billion in unpaid council tax to local authorities in England. This amount is expected to continue rising in the coming years, with an additional £642 million added to arrears in the year leading up to April. When combined with figures from Scotland and Wales, the total amount owed in these three countries has reached over £8 billion.
Campaigners are calling for a more compassionate approach to collecting council tax debt, rather than relying on bailiffs. Despite proposed changes in the way unpaid bills are pursued, the Treasury is still anticipating a 5% annual increase in council tax. This cap can be exceeded with approval from central government or a local referendum.
In the 12 months leading up to April, local authorities in England collected a total of £41.2 billion in council tax, a 7.2% increase from the previous year. However, the cumulative amount owed has risen by 11% over the same period. In Scotland, £1.5 billion is owed, and there are arrears of £263 million in Wales. This collective total of over £8 billion is double the amount of unpaid energy bills in England, Wales, and Scotland.
Charities have long argued that the current method of collecting council tax in England disproportionately affects those who are struggling to pay. Non-payment of a monthly bill after three weeks or three late payments can result in a demand for the full year’s council tax to be paid immediately, and bailiffs may be sent in to recover the debt.
Toby Murray from charity Debt Justice stated that people in council tax arrears are typically low-income and living in poverty. He believes that councils should stop using bailiffs for debt collection and implement urgent reforms.
The government has recently announced plans to cap the fees added to debt when going to court and to make 12 monthly payments the default option for council tax. They are also reviewing debt enforcement practices, including the conduct of bailiffs. The Local Government Association acknowledges the responsibility of councils to collect taxes but also recognizes the financial struggles of low-income households. They are calling on the government to provide enough funding for councils to offer support to those in need, in order to prevent further increases in council tax for those who can least afford it.
Charities are urging individuals not to ignore council tax bills and to contact their council if they are unable to pay. They recommend asking to make smaller, realistic payments and to look into potential discounts or the Breathing Space scheme, which can provide extra time to pay.