At the end of May the Local Government Association stated that councils were down £506m in missed council tax payments.
Our polling in mid-May found that 820,000 people had fallen behind on their council tax bill since the start of the pandemic. Although this figure is for individuals not households, it’s likely this figure underestimates how many households are behind on their bill. Two months have passed since this polling was conducted and the size of the shortfall councils were facing at the end of May suggests the number of households in arrears is even higher.
Regulations force councils to get a liability order from the courts in order to collect these arrears. Although councils don’t seek a liability order for every household in arrears and there are councils looking to approach coronavirus related arrears more sensitively, in the past councils have sought a liability order for most cases of council tax arrears. Despite the administrative cost of these being less than £5, the average fee that is added to peoples’ bills for getting the order is £84. If 90% of our estimated number of households in arrears are hit with a liability order, a further £61,992,000 will be added to the bills of households who have fallen behind during the pandemic.
Once a liability order is granted, councils can take action to collect arrears. In most cases, bailiffs are instructed to pursue people for the money owed. In 2018/19 local authorities issued around 2.3 million liability orders with 1.4m of these cases referred to bailiffs (61%).
Bailiffs charge a flat fee of £75 at the compliance stage to send a letter to notify people that their debt has been passed to bailiffs. Based on these past averages, 450,180 households who have fallen behind during coronavirus will see an additional £33,763,500 added to their bills by bailiffs at this stage.
Under the post lockdown plan proposed by the bailiff industry, people will be given 30 days’ notice of a visit by an enforcement agent (bailiff). If they fail to repay their debt during this period, they will be subject to an enforcement fee when a bailiff comes to their house. This is also a flat fee set in statue at £235. In 2016/17 59% of cases that received a compliance letter from bailiffs incurred this fee. This would mean 265,606 households being hit with an additional £62,417,457 in fees.
The final stage of the bailiff enforcement process is the sale of goods stage. This is when people are unable to repay and bailiffs take control of goods to sell. According to the industry’s post lockdown plan, bailiffs won’t be entering people’s homes. Very few cases get to this stage anyway, only 1% in 2016/17. The fee at this stage of the process is £110. Based on our estimates this would mean 4,507 households facing an additional £495,858 in fees.
Unless protections are put in place to prevent a wave of unfair bailiff enforcement of council tax arrears, people will be hit with huge charges at a time when they are suffering significant economic impacts as a result of coronavirus. Our conservative estimate suggest that 738,000 households could face £158,668,815 in additional court and bailiff fees.
For the average StepChange client in council tax arrears these fees would increase their debt by 44%.
 CIVEA data from 2014 submitted to Ministry of Justice’s One Year Review of the Tribunals, Courts and Enforcement Act 2007.
 The average council tax debt for StepChange Client in 2019 was £1,146. Bailiff fees and court charges would increase this by £405 to £1,651.