William Eichler 05 October 2018

Charity reveals ‘alarming scale’ of council tax debt

Charity reveals ‘alarming scale’ of council tax debt

A charity has revealed what it describes as an ‘alarming scale’ of problem debt in the country with council tax arrears accounting for a large proportion of it.

New statistics from the debt charity StepChange revealed that 326,897 people contacted them for help with their debts in just the first six months of 2018.

Of the 180,644 who received full debt advice, two thirds were under 40, although only one third of the UK population falls into this age group.

According to the Statistics Mid-Year Update, around half of the charity’s clients experienced debt because of job loss, reduced income, or health issues.

The charity also found that in the first half of 2018, over 30% of their new clients were behind on their council tax.

Almost half (48%) of new clients in the first half of the year with council tax arrears had a deficit budget, compared to just 30% of all clients. 

Phil Andrew, CEO at StepChange, noted the figures revealed a ‘stubbornly high incidence of council tax arrears’ and warned that councils were using bailiffs to pursue debt aggressively.

‘Council tax is especially concerning in light of mounting evidence that Government debt collection practices are lagging far behind best practice,’ he said.

‘Government must reflect on this evidence and ensure that Government debt is included in the new statutory debt breathing space scheme.’

A debt ‘breathing space’ scheme, which Whitehall is consulting on, would see the temporary freezing of interest and charges on debt due in order to provide people with more time to seek support.

Scotland is the only nation in the UK to currently have such as scheme.

Responding to the report, Cllr Richard Watts, chair of the Local Government Association’s (LGA) Resources Board, said: ‘Councils look to take steps to make sure that people in financial difficulty are supported, whether that’s through signposting to free debt advice, or through the joint Council Tax Protocol, which the LGA has developed alongside Citizens Advice to support those who are struggling. 

‘No council wants to have to debt collect from its residents, particularly from people on low incomes, but local authorities have a duty to their residents to collect taxes which fund essential services, such as protecting vulnerable children, caring for the elderly, collecting bins, and keeping roads maintained.

‘With councils facing a funding shortfall of almost £8bn by 2025, it’s essential that vital services are protected and that these funds are collected.’  

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