Council tax debt collection tactics putting extra pressure on people
Council tax debt collection practices are pushing some people further into the red, says Citizens Advice.
A new report from the charity warns some councils in England add extra charges to a debt, send in bailiffs and take court action before trying to arrange manageable repayment plans.
This puts people who are already in financial difficulty under extra pressure and can be counter-intuitive for councils as they can be left waiting longer for money they are owed.
Citizens Advice wants more councils to offer affordable repayment plans and to stop a practice where people who have missed a monthly council tax instalment are forced to pay the remaining annual cost in one go.
Growing numbers are turning to Citizens Advice for help with council tax debt problems, which are up by a third since 2013/14. Between April 2015 and March 2016, it helped people with 196,000 council tax debt problems in England, making it the number one debt issue for the charity.
Citizens Advice asked more than 1,000 people in England with council tax debt about their experience:
54% of people said the council’s actions made it harder to clear their debts;
71% said they had extra charges added to their bill;
48% had been visited by a bailiff;
Only 30% were offered an affordable repayment plan.
Almost half (46%) of people also said authorities stopped allowing them to pay their council tax by normal monthly instalments and asked for the remaining costs for the year in one go.
The charity says councils often impose extra charges for getting a court order after someone gets into arrears which means small debts can quickly increase.
One person who contacted the charity for help had a £27 debt which ballooned to £417 after council officials charged fees for obtaining a court order and calling bailiffs.
Of the people surveyed by Citizens Advice in the ‘Catching up: improving council tax arrears collection’ report - 65% of which were in work - 56% said they cut back on food or heating because of their council tax debt and 26% sold or pawned their belongings.
Some local authorities have made an effort to introduce better collection practices. For example, some councils use in-house bailiffs who ask debtors about their financial situation, check they are claiming benefits available to them and refer them to free debt advice. Other councils will refund some extra charges if a person sticks to an agreed repayment plan.
Gillian Guy, Chief Executive of Citizens Advice, said:
“Some councils are too quick to crackdown on people falling behind on council tax.
“Of course it’s right people should repay their council tax - but calling in bailiffs, adding on extra charges or forcing someone to pay the rest of the year’s council tax bill in one lump sum can make the situation worse for everyone.
“Some councils have developed much fairer approaches to collecting debt and as a result get money back much faster. Even simple steps, like improving communication and offering a realistic repayment plan, can ease the strain on debtors and ensure councils get what they’re owed.
“It is really important councils review their debt collection practices to make sure they are helping people to overcome their debt problems rather than making their financial problems worse. ”
The report also recommends:
Councils should ensure their reminder letters and staff encourage people to seek free debt advice.
Councils offering hardship funds should do more to promote them and make eligibility requirements clearer.
Notes to editors
- Citizens Advice carried out an online survey with 1,100 people in England who had sought the charity’s help with council tax debts between January and April 2016. It also conducted interviews with debt advisers and clients in council tax arrears. Between April 2015 and March 2016, Citizens Advice helped with 196,000 council tax debt problems in England. Over the same time, Citizens Advice helped with 212,000 council tax debt problems in England and Wales.
- The Citizens Advice service comprises a network of local Citizens Advice, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
- The advice provided by the Citizens Advice service is free, independent, confidential and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
- To get advice online or find your local Citizens Advice in England and Wales, visit citizensadvice.org.uk
- You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers.
- Local Citizens Advice in England and Wales advised 2.5 million clients on 6.2 million problems in 2014/15. For full service statistics see our publication Advice trends.
- Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 2,500 service outlets across England and Wales.