Council tax has been in the news recently, with speculation that the chancellor may decide to make sweeping reforms. This may be driven as much by fiscal pressure as by the desire to recalibrate an unloved and outdated system. But aside from its structural problems, council tax is also a massive contributor to problem debt in the UK – so it’s something we, as the largest provider of debt advice and solutions, are seeking to address.
Among the people who turn to StepChange for help with debt, over a third have council tax arrears. The typical amount they owe is over £2,000, and it’s a postcode lottery in terms of the levels of financial support or reductions given by their local authority based on their circumstances. This lack of consistency is a problem, but on top of that, the tactics used by some local authorities to try to collect unpaid council tax arrears can be genuinely frightening to people.
Very quickly after missing a council tax payment, local authorities have the right to ask you to pay the whole of the remaining year’s council tax in one go. If you don’t, they can rapidly escalate their debt recovery measures, and before long you can find yourself on the receiving end of a bailiff visit. All the time, the money you owe is mounting up as the costs of recovery action are added to your bill.
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Take our client, Luke (whose name we have changed). He fell into council tax arrears because of an unexpected redundancy and the additional costs associated with his disability. Rather than support him through the process with an affordable repayment plan, his local authority issued a liability order and outlined, which could be arguably construed as a threat, that prison was a possibility for non-payment. This is despite no one having gone to prison for council tax non-payment in the last few years. It’s for people like Luke that we need compassion placed at the heart of the process.
In an ideal world, local authorities would be working sympathetically with people like Luke who find themselves struggling financially, working out an affordable level of repayment and making flexible decisions about when to provide financial assistance or write off debt in the most difficult cases. This would balance their obligations to taxpayers to fund and provide local services with a humane approach to those genuinely struggling.
