Families in council tax debt have just £7 left at the end of the month

Council tax arrears are pushing already-struggling families into “desperate hardship”, experts have said.

Citizens Advice reported that people who owe council tax find themselves with an average of just £7 left at the end of the month after covering living costs – while four in 10 have no cash left at all.

Nine in 10 people who went to the charity for help with council tax debt were also behind on their water and energy bills.

The charity has pointed the finger at government regulations pushing local authorities to resort to extreme measures when responding to unpaid council tax bills is leaving desperate families in even more financial trouble with legal and bailiff fees.

They pile rapidly-escalating debts on people who barely have enough money to get by

Citizens Advice chief executive Dame Gillian Guy said: “Government regulations push local authorities to use harsh collection processes. They pile rapidly-escalating debts on people who barely have enough money to get by.

“Many people who need our help with council tax arrears have no more than a few pounds spare every month to repay their debts. An unexpected bill for thousands of pounds, accompanied by legal threats and bailiff action, is terrifying for the person concerned and ineffective for the council trying to recover the debt.

”To protect people from further harm, the government must change the rules to give councils the flexibility to collect council tax fairly and compassionately.”

The charity is also calling for changes to the rule that lands people with the full bill for the year just two weeks after they miss a payment – meaning that one missed payment of £167 could become a debt of more than £2,000 within nine weeks.

Council tax is by far the most common debt problem among those who go to Citizens Advice for help, proving to be more than 40 per cent more common than the next biggest debt trouble.

Cllr Richard Watts, chair of the Local Government Association’s Resources Board, said in response to the report: “Councils have a duty to their residents to collect taxes so important services, like caring for older and disabled people, protecting children, fixing roads and collecting bins are not affected. They strive to recover unpaid tax as sympathetically as possible and to provide support to households at risk of financial exclusion or hardship.

“As the Citizens Advice’s report makes clear, this needs to be supported by better guidance and funding. Councils would be in favour of it being made easier for them to recover money without having to use bailiffs, and would support the removal of the requirement for the entire annual sum to become payable if an instalment is missed.

“Bailiffs should only ever be used as a last resort by councils. Before it gets to that stage, people will have been encouraged to apply for financial support by their council. Anyone having trouble paying their council bills should get in touch with their local authority for financial help and advice as soon as possible.”

Last year the Money Advice Trust found that councils sent 2.6 million debts to bailiffs to handle. CEO Joanna Elson said reforming the law around bailiff action itself “is vital if we are to protect people from harm”.