Council Tax Debts Pushing People into “Desperate Hardship”

February 26, 2020

Council taxes owed by individuals and households to local authorities are now a very significant cause of financial problems and serious hardship for large numbers of people across the UK.

According to Citizens Advice, people who are in council tax arrears tend to find themselves with very little money left over once they’ve covered all their essential living costs every month.

Part of the problem is believed to be that councils tend to take drastic measures to collect their debts and are quick to take people to court in pursuit of money they’re owed.

It’s also the case that when someone misses a council tax payment they are often then faced with demands to pay off multiple months or an entire year’s worth of council tax bills straight away, which a lot of people simply cannot afford.

Another issue is that local councils are big users of debt collection agents who pursue council tax arrears on their behalf, which for a lot of people means facing extra charges on top of their original debts in the shape of bailiff fees.

Citizens Advice has said that it helped around 83,000 people in England to deal with council tax-related problems in 2019, which makes it by far the most raised issue among the charity’s clients.

Almost all (90 per cent) of people who approached Citizens Advice for help in relation to council tax debts last year were also having trouble covering their other essential household bills.

According to the charity, while the council tax regime as it currently exists is causing or contributing to “desperate hardship” for a lot of people, it is also failing to benefit councils in the ways that might be expected.

The charity says it has seen evidence to show that local authorities only recoup around 27 pence for every £1 they hand over to debt collectors.

“Many people who need our help with council tax arrears have no more than a few pounds spare every month to repay their debts,” said Dame Gillian Guy, the chief executive of Citizens Advice.

“An unexpected bill for thousands of pounds, accompanied by legal threats and bailiff action, is terrifying for the person concerned and ineffective for the council trying to recover the debt,” she added.

“To protect people from further harm, the government must change the rules to give councils the flexibility to collect council tax fairly and compassionately.”

Paul Barber

Head Adviser at our Manchester Office

Tel: 0800 001 4247

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