Over two million behind on council tax bills

The UK’s three largest debt charities have called on the government to change ‘ineffective’ regulations on how councils collect council tax arrears to protect households who have fallen behind due to coronavirus.

Citizens Advice, the Money Advice Trust and StepChange Debt Charity expect council tax enforcement measures to restart soon and fear that many residents who are already struggling as a result of the coronavirus outbreak will soon face harsh enforcement methods pushing them deeper into financial hardship.

Citizens Advice estimate that over two million people have already fallen behind on council tax bills as a result of the pandemic. The charities say that 2.2 million households were already behind on their bills before the start of the outbreak.

The charities recognise the need for councils to recover arrears from those who can afford to pay in order to fund vital local services. However, they are concerned that with the financial impact of coronavirus likely to be felt for many months and even years to come, existing regulations used by councils to collect debts will lead to heavy-handed tactics – such as using bailiffs – that will not recover much money for councils but instead push struggling households further into debt.

Furthermore, if someone misses one council tax payment, they become liable for their entire annual bill which can create further unmanageable debt, particularly for those dealing with the financial impact of coronavirus.

To prevent a sudden escalation of enforcement when the temporary ban on bailiff visits lifts, the charities are calling for: the introduction of a ‘pre-action protocol’ for councils to follow before beginning to enforce council tax recovery; councils to collect debts over more than one year by changing collection rate targets; people to not become automatically liable for their entire annual bill when they fall behind on installments; and for more hardship funding to councils to reduce council tax arrears accrued as a result of coronavirus.

Dame Gillian Guy, chief executive of Citizens Advice, said: “Coronavirus has caused huge financial uncertainty for local councils. But this pressure must not trigger a wave of aggressive debt collection against people who are themselves struggling to pay their bills. Aggressive collection drives vulnerable people further into debt and is inefficient. Councils get back just 27p for every £1 of debt passed on to bailiffs. The government must urgently change the rules so local authorities can collect council tax debts fairly and sustainably. Otherwise millions of people could face the prospect of heavy-handed bailiff enforcement on bills they can’t afford to pay.”