National regulations governing how council tax arrears are collected are inflexible, push people further into debt and need to change, says Citizens Advice Ashfield.
That’s because when people miss a single council tax payment, they become liable for the full year’s council tax bill soon after. The rules also mean councils are pushed to use the court process to collect arrears, and don’t set out what good collection looks like.
Citizens Advice Ashfield says the current regulations governing how arrears are collected limit the ability of local councils to collect debts in a fair way. This can cause debts to spiral making it harder for people to get their finances back on track.
The call comes as new figures published by National Citizens Advice this month show that last year, for every £1 referred to bailiffs for collection, councils received just 27p in return. It 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% of the arrears they were sent.

Last year Citizens Advice Ashfield helped 278 people with council tax issues. It is also the most common debt problem brought to the charity, helping 86,000 people nationally each year. In 2018, an estimated 2.2 million households in England were behind on their council tax bill.
Reforming how council tax is collected is just one of the ways Citizens Advice is asking the next government to help people recover from debt.

What needs to change?

Some aspects of the process are not within the council’s power to change. That’s why Citizens Advice want to see central government improve the regulations which govern how council tax is collected on a national level, to enable councils to collect debt fairly and efficiently.
As a minimum, the next government should amend the Council Tax (Administration and Enforcement) Regulations 1992 to:

  1. Stop people being asked to pay their entire annual bill if they miss 1 monthly payment. This would make it easier for people to arrange and keep up with repayments.
  2. Give councils the power to initiate deductions from benefits without getting a liability order. These would need to be made at affordable levels so people could continue making repayments.
  3. Set out more steps councils must take before using the court process. This would ensure that all people in debt are given the option of affordable repayments to get back on track.
  4. Remove the threat of imprisonment for council tax arrears in England. This would protect the most vulnerable people and change the culture of debt collection to be more positive.

Kathryn Stacey, Chief Officer at Citizens Advice Ashfield said:
“Council tax debt is the biggest debt issues we help people with in Ashfield and many of the problems relate to the way this is collected.
“Our advisors see first hand the impact the quick escalation of the debt through a court process and the use of bailiffs has. These practices add extra costs, can worsen people’s mental health and make it harder for them to get their finances back on track.
“We work closely with the Ashfield District Council to help those most vulnerable clients through direct contact with the collections team and ‘Council Tax Protocol’ agreed last year but the way regulations control councils’ powers to collect council tax debts makes it hard for them to do so in a fair way. That’s why we want central government to improve the collection rules in England and put an end to ineffective practices, including charging a full year’s bill after a single payment is missed.”
If you are struggling to pay your council tax bill or have other debts, Citizens Advice Ashfield can help. 

  1. If you can’t pay your council tax bill or other debts, seek advice from us straight away by calling the debt team on 01623 784385 or email [email protected]
  2. Work out how much you owe – and if you have other debts, make a list of who you owe money to and add up how much you need to pay each month. If you don’t have your most recent statements, contact your creditor to find out what you owe.
  3. Prioritise your debts – council tax is a priority debt as there can be serious consequences if you don’t pay. Other priority debts are rent, mortgage, energy bills and court fines. These should always be paid first. Separate these and work out how much you owe.
  4. Check if you can claim council tax reduction or a council tax discount or if there are any other ways of increasing your income or reducing expenditure.
  5. Work out how much you can pay – create a budget by adding up your essential living costs, such as food and housing, and taking away these from your income. Any money you have spare can be put towards your debts. Citizens Advice budgeting tool can help.
  6. Paying urgent debts – You might have to contact priority creditors quickly in urgent situations, such as if you are about to be evicted. Tell them you’re seeking debt advice so you can find a way forward. You could try to pay them something if you can afford to.
  7. Paying non-urgent debts – If you have any money left after paying priority debts, consider getting a free debt-management plan. You’ll make one monthly payment to the plan provider, who will handle paying your creditors. Or contact your creditors and offer them what you can afford to pay.
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