Council tax debt collectors 'significantly harming' health of those struggling to pay, report finds

Councils are “significantly harming” the health of vulnerable residents by sending council tax debt collectors after them, a leading debt charity has warned.

Those who miss just one payment are being threatened with rapidly escalating fees, bailiffs breaking down their doors and even imprisonment as part of a postcode lottery hitting people struggling to pay bills.

Calling for reform of the system, the StepChange charity said rules were needed to make sure all local authorities helped those struggling to pay council tax, and to relegate enforcement action to a final resort.

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“Aggressive debt collection practices are counterproductive: from troubling treatment of arrears to unhelpful communication, to harmful enforcement action, the current council tax collection journey is at best outdated and at worst dangerous for people who fall behind on this bill. It’s creating harrowing outcomes for many vulnerable households,” said Vikki Brownridge, CEO of StepChange debt charity

“While we understand that councils need revenue to fund essential public services, a fundamental overhaul is needed to ensure the system is constructive for all involved.” 

Amid a crisis in local government, broke councils are hiking council tax at the same time as the cost of living crisis makes bills unaffordable for a growing number of Brits.

Statistics show that a total of 80 people were imprisoned for not paying council tax in the five years to 2023. Scotland, Northern Ireland and Wales do not imprison residents for non-payment.

Tracey, a StepChange client from Blackpool, said her council tax debt began when her and her husband found their income cut during the pandemic and quickly fell into arrears.

She said the council told her they could not help until the debt was bad enough to go to court.

“It wasn’t long before the debt was passed on to an enforcement agency, and bailiffs started knocking on the door, adding more fees on each time,” she said.

“However, our situation didn’t improve for some time, and every year the cycle has continued, with me begging the council for help, receiving a court liability order, having fees added to the debt, and then the enforcement action.”

More than 90% of clients surveyed by StepChange who had experienced bailiff action over council tax debt said it harmed their mental and physical health, as well as their sleep.

The charity called for the government to boost council tax affordability by improving support for those who cannot pay, establishing standards to support those who cannot pay, and establishing a statutory regulator for bailiffs.

As of March 2023, councils faced £5.5bn in unpaid council tax bills, a figure spanning back multiple years which increased by £513m in a single year.

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