There's a way to make the council tax system fairer – if only we had the will

Council tax has been in the news recently, with speculation that the chancellor may decide to make sweeping reforms. This may be driven as much by fiscal pressure as by the desire to recalibrate an unloved and outdated system. But aside from its structural problems, council tax is also a massive contributor to problem debt in the UK – so it’s something we, as the largest provider of debt advice and solutions, are seeking to address.

Among the people who turn to StepChange for help with debt, over a third have council tax arrears. The typical amount they owe is over £2,000, and it’s a postcode lottery in terms of the levels of financial support or reductions given by their local authority based on their circumstances. This lack of consistency is a problem, but on top of that, the tactics used by some local authorities to try to collect unpaid council tax arrears can be genuinely frightening to people.

Very quickly after missing a council tax payment, local authorities have the right to ask you to pay the whole of the remaining year’s council tax in one go. If you don’t, they can rapidly escalate their debt recovery measures, and before long you can find yourself on the receiving end of a bailiff visit. All the time, the money you owe is mounting up as the costs of recovery action are added to your bill.

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Take our client, Luke (whose name we have changed). He fell into council tax arrears because of an unexpected redundancy and the additional costs associated with his disability. Rather than support him through the process with an affordable repayment plan, his local authority issued a liability order and outlined, which could be arguably construed as a threat, that prison was a possibility for non-payment. This is despite no one having gone to prison for council tax non-payment in the last few years. It’s for people like Luke that we need compassion placed at the heart of the process.

In an ideal world, local authorities would be working sympathetically with people like Luke who find themselves struggling financially, working out an affordable level of repayment and making flexible decisions about when to provide financial assistance or write off debt in the most difficult cases. This would balance their obligations to taxpayers to fund and provide local services with a humane approach to those genuinely struggling.

To give credit where it’s due, this does sometimes happen, and we applaud those local authorities who are trying to support their local residents in this balanced way. Yet too often, our clients have experienced poor communications, a lack of empathy, and a one-size-fits-all approach which doesn’t account for their personal or financial circumstances. It’s not surprising that many clients are simply too scared to try to tackle the issue with their local authority.

Understanding this last point is crucial. Being scared to tackle your debt problems doesn’t necessarily mean that you are trying to avoid your obligations. Behavioural insight consistently shows that people are much more likely to communicate if they believe an organisation will genuinely try to help them. Yet local authority websites can be very intimidating if you search for information on what to do if you’re having trouble paying your council tax.

As the government’s consultation on council tax closes, our submission makes the case for a fairer process which provides room to repay. We have a chance to ensure compassion is embedded into the council tax system, in a way that is more normalised in other sectors. While people can still find it intimidating to talk about their debts, this positive culture has clearly influenced the credit sector, and consumers are becoming used to being treated with empathy and support when they face financial difficulty. We need this to happen in the world of central and local government debt too.

Vikki Brownridge is CEO of StepChange Debt Charity.

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