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Charities call for council tax reform ahead of August debt D-Day

  • Government changes risk creating debt D-Day of 23 August
  • Over 1.3 million households likely to have built up council tax arrears because of coronavirus
  • Carers and people who’ve been shielding likely to be hit hardest

The UK’s three largest debt charities - Citizens Advice, Money Advice Trust and Stepchange - have today written to the Local Government Minister to call for urgent action on council tax. The charities are urging the government to implement simple measures that could protect millions of people from the prospect of spiralling council tax debt 

Following legislation which comes into effect on Wednesday 24 June, the ban on face-to-face bailiff collection will now come to an end on 23 August. This is the same day as protections from eviction end for people in the private rented sector and comes at a time when redundancies are expected to rise.

The charities are warning of potentially huge problems for those behind on council tax. Outdated government regulations mean councils often resort to bailiffs to collect outstanding debts. These rules drive councils to using court-based enforcement to recover council tax arrears, which is both harmful and inefficient. In 2018-19, the use of bailiffs added £200 million of fees to people’s debts, but councils recovered less than 30p out of every pound of debt referred. Councils are also the largest users of bailiffs – 1.4 million council tax debts were passed to bailiffs by councils in England and Wales in 2018/19.

According to figures from the Local Government Association, over £500m of council tax has gone unpaid during the coronavirus outbreak, a figure which could mean over 1.3million households in council tax arrears. While many councils have been supporting residents during the pandemic, their precarious financial position - and the government’s restrictive rules - may leave them little choice about calling in the bailiffs in August.

Research from Citizens Advice has shown that council tax arrears have hit some groups particularly hard. People who are behind on their council tax because of Covid-19 are twice as likely to have been shielding or at increased risk of the virus. They are also four times more likely to be caring for older family members.

Central government reform is needed to resolve this problem before the bailiff ban is lifted. The charities are calling for simple changes to the council tax regulations to give councils more flexibility to recover debts outside the court process. This decision can be enacted by ministers without taking up precious parliamentary time and has been supported by local councils.

Dame Gillian Guy, Chief Executive of Citizens Advice, said:

“The government now has a two-month window of opportunity to make changes to council tax collection that will help millions of people facing the prospect of spiralling debt. Over the last few years, Citizens Advice has helped hundreds of thousands of people with council tax arrears.

“Using bailiffs to collect debts is a blunt tool that’s extraordinarily damaging to those on the receiving end, and economically ineffective for councils.  Former government ministers, backbenchers, charities, campaigners and councils themselves are lining up to call for change on this issue. 

“People struggling with their council tax bills could now face a nervous summer waiting for the knock at the door. The government must take the opportunity to act to help people avoid this.”

Joanna Elson OBE, chief executive of the Money Advice Trust, said:

“There is an urgent need for changes to the way that council tax is collected before bailiff visits are allowed to resume.  The government must act to change the rules to ensure local authorities collect council tax debts in a fair and compassionate way, giving people the time they need to repay without unnecessarily resorting to bailiffs.

“Sadly, millions of people have already fallen behind with their bills – these changes are needed now to prevent a bad financial situation being made worse by heavy-handed debt collection practices.”

Phil Andrew, chief executive of StepChange Debt Charity, said:

“As things stand, there is a fundamental disconnect between the way in which enforcement against debts like council tax is being restarted and the way in which regulated lenders are expected and required to behave by the FCA, with a clear focus on realistic affordability and fair treatment. It’s simply not right that, after everything we’ve experienced through the pandemic, the resumption of council tax debt collection and enforcement seems set to resume on a “business as usual” basis.

“Improving council tax debt collection needs to be part of the Government’s wider post-Covid financial recovery strategy. If ever there was a time to grasp the nettle and reform the outdated mechanisms that hinder local authorities from adopting a more compassionate, flexible and realistic way of reaching affordable repayment plans on council tax, now is surely that moment.”

Notes to editors

  1. Research conducted by Opinium Research. Field dates: 13th-19th- May 2020. Sample size 2,009 UK adults, weighted to be nationally representative.
  2. LGA analysis of council tax returns suggested £506m of missed council tax payments between March - May 2020 [‘Coronavirus: certainty needed over ongoing COVID-19 funding for vital local services’, local.gov.uk, 29 May 2020]
  3. ‘LGA responds to Citizens Advice report into debt collection’, local.gov.uk, 20 February 2020
  4. Eric Pickles: Flexibility is needed for those falling behind in paying Council Tax, ConservativeHome, 12 June 2020, Damian Hinds: Government has overtaken the private sector as the harshest debt collector, ConservativeHome, 27 April 2020;  MPs and peers lobby Chancellor to stop debt collectors chasing coronavirus council tax arrears,Daily Telegraph, 10 June 2020; Stop The Knock; Taking Control
  5. Council tax debt collection isn’t efficient or effective, Citizens Advice, November 2019 [page no longer available]
  6. Money Advice Trust research has shown that local authorities referred 1.4 million council tax debts to bailiffs in the 2018/19 year.
  7. We helped 2.6 million people face to face, by phone, email and webchat in 2017-18. For service statistics see our monthly publication Advice trends.
  8. Citizens Advice staff are supported by over 23,000 trained volunteers, working at over 2,500 locations in England and Wales.

Simon Clarke MP Minister of State for Regional Growth and 

Local Government Ministry for Housing, Communities and Local Government 

2 Marsham Street 



24th June 2020

Council tax debt enforcement during the Covid-19 pandemic

As the UK’s three largest charitable providers of independent debt advice, we welcome the fact that the Government is now working at pace on plans for a recovery package to boost the economy following lockdown.

Your department now has a vital window of opportunity to put in place much-needed protections for the millions of people who have fallen behind on their council tax bills and face the threat of bailiff enforcement from the end of August.

According to independent research by StepChange, 4.6 million households have built up over £6 billion of arrears and debt that is directly attributable to the coronavirus crisis – £1,000 arrears and £1,000 in debt for every family affected

Upwards of £500 million of this is in unpaid council tax over the lockdown period according to the Local Government Association. This suggests as many as 1.3 million households are in council tax arrears as a result of covid-19.

Research published tomorrow from Citizens Advice (attached) shows that among those most financially affected by the ongoing pandemic and social distancing regulations are carers and people in the ‘shielded’ group. These groups are up to four times as likely to have missed council tax payments as a result of covid-19.

The existing regulations around council tax debt collection push councils to use out-of-date and inefficient methods that don’t provide value for money, while pushing people on low incomes further into debt. While we welcome the department’s review of guidance, it will not give councils the power, or council tax payers the protection, that legislation would.

A simple change to the Council Tax (Administration and Enforcement) Regulations would help solve this problem without needing time-consuming primarily legislation. Changes are needed to give councils more flexibility to recover debts in an affordable way outside the court process, and to ensure they offer affordable repayment plans to residents. Given the scale of financial difficulty during the covid-19 crisis, we would urge the government to not lift the ban on bailiff visits until further protections are in place.

Former government ministers, backbenchers, charities, and councils themselves are calling for change on this issue. We are keen to work with the government to take advantage of the window of opportunity this new deadline affords, and look forward to hearing the department’s plans to protect people falling behind on their council tax bills once bailiff activity resumes. The content of this letter will be published on our respective websites tomorrow.

Yours sincerely,

Dame Gillian Guy, Chief Executive Citizens Advice

Joanna Elson, OBE Chief Executive Money Advice Trust

Phil Andrew, Chief Executive StepChange Debt Charity