We warmly welcomed the opportunity to respond to the Ministry of Housing, Communities and Local Government’s (MHCLG) consultation on modernising and improving the administration of council tax in England.
Over a third (37%) of StepChange clients in England were in council tax arrears in 2024, at an average amount of £1,962. Those in this position were disproportionately likely to be women, renters, and single parents, compared to both clients overall and national averages. While we recognise that local authorities are operating in a challenging environment and council tax funds vital services in their communities, too often, clients facing council tax arrears are exposed to severe and harmful debt collection practices.
StepChange has long been calling for interventions to both ensure and safeguard the affordability of council tax, and better protect those who fall behind on this bill through the introduction of greater flexibility and empathy into the debt collection journey. Most recently, our 2024 policy report Looking through the keyhole made a number of recommendations to central and local government, advocating for a more compassionate system which would give people more room to repay their arrears.
We were therefore very pleased to see central government consult on several council tax reforms, including the extension of the timeline before a local authority can demand the full year’s payment and seek a liability order. This would allow local authorities more time to engage constructively with their residents, to understand their circumstances, provide support and facilitate sustainable arrangements which reflect households’ often complex situations – for example, those which involve multiple debts and additional vulnerable circumstances.
Other proposals explored in this consultation, including capping liability order charges to reflect ‘reasonable’ costs incurred, are welcomes moves. However, we want to see the government go further than the proposals currently contained in this publication. In particular, we want to see the government step in to:
- End the postcode lottery of Council Tax Support, ensuring that 100% reductions can be re-established for those on the lowest incomes
- Tackle underclaiming of Council Tax Support by increasing awareness, automation and uptake to make sure those who are eligible, receive it
- Develop a statutory protocol for council tax debt collection, which would require councils to take certain steps before charging the annual bill, seeking a liability order or taking enforcement action
- Work with local authorities to properly establish that bailiffs should only be used as a last resort, which includes councils being encouraged to completely exempt recipients of Council Tax Support from bailiff enforcement action
- Remove the outdated sanction of imprisonment for non-payment of council tax in England, in line with the other UK nations.
We noted that the above recommendations, alongside the proposals already being explored in this consultation, compliment simultaneous work being undertaken by the Ministry of Justice, to bring about a statutory regulator of the bailiff industry – a long overdue move which StepChange has been pushing for, alongside lots of other advocates, over many years.
Local authorities should be supported by central government to ensure that they have enough funding and resources to make these changes happen quickly and deliver consistent, good collection practice. Indeed, funding responsible debt collection is a cost-effective way to improve outcomes for those struggling with council tax debt and enable sustainable collection among those who can afford to repay.
This consultation serves as an important stepping stone on the path to more responsible, compassionate council tax debt collection. These interventions should come together as a coherent package of reforms, focused not only on the important move to amend collection and enforcement timelines, but also to bring about changes which emphasise preventative, early and sustainable engagement, as well as to raise the bar on the quality of interactions and support more widely.