Council tax collection practices work for no one, says Citizens Advice

By agency reporter
November 14, 2019

Households struggling to pay their council tax are being pushed into further debt as outdated regulations see councils resort to bailiffs to collect arrears, says Citizens Advice as it publishes new research.

Currently, when people miss a single council tax payment they automatically became liable for the full year's bill. The rules also push councils to use the court process to collect arrears, and do not set out what good collection looks like.

It says the regulations governing the collection of council tax in England limit the ability of local councils to collect debts in a fair way. Instead the regulations make it harder for people to get their finances back on track.

Citizens Advice is calling on the next government to reform these rules as part of the charity's election manifesto. It says many cash-strapped councils are resorting to using bailiffs which its evidence shows is both ineffective and expensive.

Its new figures from Freedom of Information requests show that last year, for every £1 referred to bailiffs for collection, councils received just 27p in return.

The national charity has also found:

  • Bailiffs cost 53p for every £1 they recovered. Most of these costs are paid by people in financial difficulty. This is money that could otherwise be used to pay back arrears
  • Bailiffs failed to collect an average of £2.5 million per council last year
  • Over the last five years, on average, bailiffs only collected 30 per cent of the arrears they were sent.

Each year, Citizens Advice helps 86,000 people in England with council tax issues – it is the most common debt problem brought to the charity. In 2018, an estimated 2.2 million households in England were behind on their council tax bill.

Citizens Advice wants the next government to make it easier for councils to improve collection practices. It says changes to the Council Tax (Administration and Enforcement) Regulations 1992 are needed to:

  • Stop people being asked to pay their entire annual bill if they miss one monthly payment
  • Make it easier for councils to improve collection by giving them more powers to collect debt without getting a court order first
  • Improve practice across the country by setting out more steps councils must take before using the court process
  • Protect vulnerable people by removing the threat of imprisonment for council tax arrears.

Karen F, who is unemployed and caring for her adult son, said: "I live and care for my adult son who has a mental health condition so am not currently working. When I fell behind on my council tax, the council sent the debt over to the bailiffs.

"I called the bailiff to explain I could not afford to pay the original debt, let alone the fees that had been added, pleading for them to send the debt back to the council because even if they took items from my home, it would not cover the debt.

"It then went quiet for weeks and I didn't hear from the bailiffs or council. Then I got a letter from the council who said I had missed another payment and if I did not pay I would go to prison.

"The bailiff had sent the debt back to the council but no one had told me anything and I missed the payment as a result.

"The whole thing was so draining and scary. It would have been easier and less stressful if the council had just allowed me to make a repayment arrangement in the first place."

Gillian Guy, Chief Executive of Citizens Advice, said: "Council tax debt is now worryingly common but the collection system is broken. It doesn't work for the people who are driven further into debt and it doesn't work for councils or the taxpayer who are seeing millions of pounds go to waste each year.

"The next government has a real opportunity to fix the outdated regulations that push councils to use ineffective collection practices and protect people from spiralling further into debt when they fall behind on their council tax.

"It must give councils the powers to take a more flexible approach to collecting arrears and put an end to punitive processes such as charging a full year's bill after a single payment is missed."

* Read Council Tax collection isn't efficient or effective here

* Read the Citizens Advice election manifesto here

* Citizens Advice https://www.citizensadvice.org.uk/

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