Rachel, a 37-year-old single mother, was living in fear of enforcement agents pursuing council tax debt and on the brink of suicide when her family intervention support worker sought help from Council Tax Advisors (CTA), a not-for-profit organisation dedicated to providing free expert advice and assistance to people in crisis over council tax arrears.
A mother of two with a history of mental illness and reliant on Employment and Support Allowance, Rachel* was struggling to cope with daily tasks let alone enforcement agents. Before CTA stepped in, Rachel could see no way out of the crisis that resulted from her council taking legal action over £1,100 of council tax arrears, resulting in a liability order and the appointment of enforcement agents to recover the debt. She was unaware of her legal right to refuse entry to the agents, and that if they crossed the threshold they would have a right to return and seize her possessions.
She was unaware of her legal right to refuse entry to the agents
CTA, which operates across Britain, obtained legal authority to represent Rachel, assigned her an experienced case worker and contacted the agent to halt enforcement action while they gathered vital facts needed to achieve a positive resolution. This entailed a comprehensive financial health check to form the basis of an affordable repayment plan taking full account of Rachel’s circumstances and actual disposable income. The final step involves CTA negotiating an agreement with enforcement agents on the repayment plan, a strategy that has succeeded in 90 per cent of cases taken on by CTA.
Rachel is among an estimated one in 10 UK households affected by council tax debt, a problem that threatens to reach epidemic proportions. UK arrears are already £2.7bn and likely to rise further as council tax increases take effect. The problem stems from a combination of radical welfare reforms (including the abolition of centralised council tax benefit, which resulted in many low-income households losing council tax exemption), stagnant wages, zero-hours contracts and a higher cost of living that have left many families on a financial knife-edge.
For vulnerable people like Rachel, a strong-arm approach to debt recovery only drives them deeper into despair, offering no hope of a sustainable solution. CTA is seeking to raise awareness of its free expert service so that more families can avoid the potentially serious repercussions of failing to tackle council tax debt, including arrestment of wages and benefits, having possessions forcibly removed from their homes, and in the worst cases, homelessness.
We have also embarked on a new initiative, Council Direct, which entails working with councils to introduce CTA as an independent free source of expert help for customers at an earlier point in the debt recovery process. Most councils have a rigid and aggressive approach to pursuing debt, removing the right to pay in instalments unless arrears are settled within seven days of a reminder and moving swiftly to legal action.
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In practice, this exacerbates problems as most people are juggling multiple debts. Tackling one debt in isolation and demanding a large lump sum payment can push people into emergency loans, making future defaults likely and a sustainable repayment solution unlikely. Aggressive debt recovery action is also largely counter-productive – research shows that 80 per cent of liability orders are returned unpaid as people cannot afford payments demanded.
CTA’s casebook involves £12m of arrears and we receive fresh calls daily from people in desperate need of help, at least half of whom have children. Around 60 per cent of people who seek CTA’s help are in some form of paid employment but commonly have multiple debts, often linked to periods of unemployment, illness or marital breakdown, while 30 per cent are unemployed and in receipt of attachable benefits.
CTA is funded by and works in partnership with The Carrington Dean Group, an FCA-authorised business that provides ethical advice and solutions on a range of financial issues, including problem debt. CTA has handled cases involving every UK council area and has provided information and help to more than 250,000 people via its website, helpline and expert advisers.
Our approach helps society in two ways: by helping families resolve debt and by maximising council income for essential public services. In the last 12 months CTA has helped recover £3.5m in arrears through affordable repayment plans which can involve payments as low as £20 a month depending on clients’ circumstances.
Today, thousands like Rachel live in fear of enforcement agents, CTA’s mission is to deliver help before the dreaded knock on the door.
Peter Dean is chief executive of Council Tax Advisors
*Not her real name, but all other facts pertaining to the case are accurate