The Money Advice Trust and StepChange debt charity found that problems with council tax arrears among their clients had hit an all-time high, while they were concerned councils’ increasing use of bailiffs is adding additional stress and anxiety to people in debt.
They called for all councils to rule out bailiff action in cases where a resident receives council tax support, and had therefore already been identified as vulnerable. Following a localisation of council tax support schemes, more local authorities, nearly 80% of councils in England now require low-income households to pay some of their council tax bill.
Joanna Elson, chief executive of the Money Advice Trust, said that with council tax arrears on the rise, it has never been more important for councils to improve their debt collection practices.
An analysis of StepChange Debt Charity’s clients found that since 2011, the number of the charity’s clients in arrears with their council tax increased from 11% to 30%.
Results from a free advice service run by the MAT, National Debtline, showed similar figures.
MAT also found that council’s use of bailiffs is on the rise. Around 2.1m debts were passed to bailiffs by local authorities in 2014/15 – a 16% increase over the two-year period. Of these, 1.27 million referrals related to council tax arrears.
Mike O’Connor, chief executive of StepChange said councils’ approach is counterproductive and often more aggressive than that of private companies.
Looking to secure payment through the court process and instructing bailiffs has become their “default” position, he added, but this could prove “counterproductive”.
As well as adopting rules to reduce bailiff action, the trust also called for councils to put greater emphasis on developing affordable payment plans. This would replace the current approach with one that is both “fairer and more constructive”, said O’Connor.
Responding to the report, Local Government Association’s resources portfolio holder Claire Kober agreed bailiffs should only ever be used as a last resort.
She said before bailiffs are involved several letters should have been written, people should have been encouraged to apply for financial support, and efforts to arrange new payment plans or attach the debt to a salary should be made.
“Significant cuts to the money councils receive to look after the elderly, protect children, repair roads and collect bins, mean many have had little choice but to reduce council tax discounts for the working-age poor or low income families – who may have never paid council tax before – to avoid finding even more savings from spending on local services to meet the shortfall,” she highlighted.
“We have worked closely with Citizens Advice on a protocol for councils using bailiffs when recovering debts. It includes the need for fair collection and enforcement policies and the ability for councils to take back cases involving vulnerable families.”
