Councils have the power to end the use of bailiffs for good. It’s time for them to show leadership, says Joe Cox, senior policy officer, Debt Justice.
We are in the middle of the biggest cost of living crisis in a generation – and bailiffs are making bumper profits out of communities weighed down by debt.
Some of these profits are coming from local authorities calling in the bailiffs to extract payments from their own residents. Bailiff use is cruel, outdated and ineffective. It is time for councils to find more ethical alternatives.
Nearly 13 million people are now falling behind on bills or finding that making their repayments is a heavy burden due to the cumulative effects of the pandemic and the cost of living crisis. This is having an increasing impact on council tax collection rates – £5.5bn of arrears are now owed to English councils.
Local authorities are under huge financial pressure after a decade plus of austerity and rising demand for their services. In this context, councils feel like they have an increasingly difficult job in balancing support for residents with their obligation to collect council tax to fund services. However, there is no evidence that more severe collection practices, including bailiff use, increase collection rates.
What we hear through our Together Against Debt network as well as through conversations with debt advisors and community groups is that residents simply cannot afford the bills. This concurs with research showing a correlation between higher poverty and lower collection rates.
Half the Citizens Advice clients currently seeking debt advice have a negative budget, with the average balance being £28 in the red at the end of the month after paying for essentials. Bailiff fees add on average £310 of extra debt for people already struggling with council tax arrears. Last year Trussell Trust research showed that council tax debt is pushing people into destitution and reliance on food banks.
This is a false economy for councils. As a result of bailiff enforcement and collection fees, residents can become unable to make council tax contributions for years into the future as well as being more likely to seek discretionary and housing support.
People find being targeted by bailiffs a highly distressing experience. Poor enforcement practice is widespread – an estimated one in three bailiffs break the rules, including by entering people’s homes (sometimes with children inside) before six am or after nine pm, seizing possessions from the wrong people, using force to enter and intimidate. They often cause trauma in the process.
To tackle this injustice requires leadership from the Government and local authorities. The Government must fund local authorities properly, ensuring every council can afford a 100% Council Tax Reduction scheme to stop hard up residents falling behind payments in the first place.
Local authorities must focus on tackling the root causes of missed payments as well as providing more flexible collection. Offering greater discretionary support and adequate council tax reduction schemes are vital prevention measures. Councils should also automatically generate updated payment plans with monthly instalments, not aggressively demand entire annual bills after a missed payment.
Identifying households that are at risk of arrears by using cross-department data sharing can also enable councils to proactively support people. This can lead to earlier interventions, like signposting to free debt advice and other support services.
After campaigning from ACORN and Debt Justice, Manchester City Council recently announced plans to give residents in council tax arrears the ability to spread repayments over two years, rather than one.
Manchester City Council are also implementing a local ‘breathing space’ scheme to give residents in arrears the ability to pause collection activity whilst they seek to stabilise their finances.
Manchester City Council’s implementation guidelines suggest that greater resident support ‘may actually support a higher ultimate collection rate’.
Finally, councils need an irrecoverable debt policy which accepts that not all debts can be collected and contains provision for writing off uneconomical debt collection. If unaffordable debt repayment demands will push residents into poverty, they should be written off instead.
Councils have the power to end the use of bailiffs for good. It’s time for them to show leadership.
