The financial burden on UK households continues to intensify as newly released figures reveal a staggering £6.6 billion in unpaid council tax owed to local authorities in England alone. An additional £642 million was added to these arrears in the year leading up to April, pushing the total cumulative amount for England, Scotland, and Wales to over £8 billion. This sum is now double the amount of unpaid energy bills across the three nations.
Campaigners are advocating for a more compassionate approach to council tax debt collection, particularly urging an end to the use of bailiffs. While the government is proposing changes to the rules governing the pursuit of unpaid bills, the Treasury's future financial planning assumes a 5% annual increase in council tax. Chief Secretary Darren Jones confirmed this projection during a committee examination of the recent Spending Review, stating, "We are doing that, yes." Councils currently have the authority to raise council tax by up to this amount, with exceptions for local referendums or central government approval.
The latest statistics for England indicate that £41.2 billion in council tax was collected in the 12 months to April, a 7.2% increase (£2.8 billion) from the previous year. However, the cumulative amount owed has concurrently risen by 11% over the same period. In Scotland, the arrears stand at £1.5 billion, and Wales accounts for £263 million.
Charities have consistently highlighted that England's council tax collection methods disproportionately penalize those genuinely struggling to make payments. Under current regulations, missing a single monthly payment for three weeks, or accumulating three late payments, can trigger a demand from the council for the entire year's council tax to be paid in full. This can swiftly escalate to bailiff action to recover the debt.
Toby Murray from the charity Debt Justice emphasized the plight of those affected: "People in council tax arrears are overwhelmingly on low incomes, and many are living in poverty. Rather than help, councils are sending in the bailiffs - punishing people for struggling with their bills. Councils should end the use of bailiffs for council tax debt collection and instead introduce urgent reforms."
In response, the government recently unveiled proposals to cap fees added to debts when cases go to court and to relax the rules on when a household becomes liable for a full year's bill. Ministers are also actively reviewing debt enforcement practices, including the conduct of bailiffs. Furthermore, there's a proposal to make 12 monthly council tax payments the default option, instead of the current 10.
The Local Government Association (LGA), representing councils, acknowledges its responsibility to collect taxes for local services but recognizes that "times are still tough for many low-income households." The LGA stresses the need for adequate government funding to enable councils to provide essential council tax support to those who need it, warning that without this, "it is almost inevitable that bills will continue to be forced up for those who can least afford to pay."
