Citizens Advice: Hidden financial hardship of those in council tax arrears revealed Image: Adobe Stock

Report says many people in council tax arrears “can’t afford to pay their debts”

Citizens Advice research found that many people in council tax arrears can’t afford to pay their debts, and have an average of just £7 left at the end of the month after covering their living costs. Some four in 10 have no money left at all.

Nine in ten of the people who seek help from Citizens Advice with council tax debt also owe money on other household bills, most commonly water and energy costs.

The charity claimed that outdated government regulations are forcing these people into sometimes desperate hardship. Adding that the rules push councils to use the courts to recover council tax debts which can add legal costs and bailiff fees to the debt.

Dame Gillian Guy, chief executive of Citizens Advice, said:

“Government regulations push local authorities to use harsh collection processes. They pile rapidly-escalating debts on people who barely have enough money to get by.

“Many people who need our help with council tax arrears have no more than a few pounds spare every month to repay their debts.

“An unexpected bill for thousands of pounds, accompanied by legal threats and bailiff action, is terrifying for the person concerned and ineffective for the council trying to recover the debt.

“To protect people from further harm, the government must change the rules to give councils the flexibility to collect council tax fairly and compassionately.”

Missing one payment means full balance is due within two weeks

The charity says the rules also mean people become liable for the full annual bill two weeks after a missed payment. This means that missing an average council tax payment of £167 in the first month of the financial year can escalate to a debt of over £2,000 in just nine weeks.

It says that this is almost 300 times the monthly amount available to the average person seeking support from Citizens Advice on council tax arrears.

Last year, the charity helped more than 83,000 people in England with council tax problems, over 40% more than the next biggest debt issue.

Marcia sought help from Citizens Advice on council tax arrears. She had to stop work owing to poor health and began applying for benefits. While she was waiting for a decision, she got behind on rent, council tax and energy bills.

She made one payment to the council to cover both old and new arrears. However, after a few months she was told that she wasn’t paying anything towards the old debt, so a bailiff would now collect. She said:

“I have had the bailiffs round which is scary as I just do not have the money to pay them. They are asking me to repay so much that, if I do pay it, I won’t have enough money to pay towards my gas and electric debt or have food.

“It’s really stressful as I just do not know how I can afford to repay all these debts when I am expected to pay out more than I have coming in.”

Responding to the report, Cllr Richard Watts, Chair of the Local Government Association’s Resources Board, said:

“Councils have a duty to their residents to collect taxes so important services, like caring for older and disabled people, protecting children, fixing roads and collecting bins are not affected. They strive to recover unpaid tax as sympathetically as possible and to provide support to households at risk of financial exclusion or hardship.

“As the Citizens Advice’s report makes clear, this needs to be supported by better guidance and funding. Councils would be in favour of it being made easier for them to recover money without having to use bailiffs, and would support the removal of the requirement for the entire annual sum to become payable if an instalment is missed.

“Bailiffs should only ever be used as a last resort by councils. Before it gets to that stage, people will have been encouraged to apply for financial support by their council. Anyone having trouble paying their council bills should get in touch with their local authority for financial help and advice as soon as possible.”


Help is on hand from the local councils

Both the councils covering Marston Vale urge those struggling to pay their council tax, to contact them straight away. Help is available such as rescheduling monthly instalments, changing from monthly to weekly or extending from ten to twelve monthly payments. 

A Bedford Borough Council spokesperson said:

“The Council has a financial and legal responsibility to collect the sums which are owed to it, to ensure that crucial services continue to be delivered for local residents.

“We proactively work to ensure that no one pays more than they have to, promoting benefits and discounts that an individual or business may be entitled to. We will always try to work with residents on repayment options. We would encourage anyone who is worried about their bills to get in touch with us early, rather than just ignore the problem.

“Bedford Borough Council has a Fair Debt Collection Policy in place which sets out the Council’s fair, proportionate and consistent approach to collecting debts.”

Bedford Borough Council has published its Fair Debt Collection policy here.

Cllr Richard Wenham, Central Bedfordshire Council‘s deputy leader and executive member for Corporate Resources, said:

“We recognise that anyone can fall on hard times and struggle to pay their bills. There are various ways we can help and we’d encourage anyone who is experiencing difficulties to contact us so that we can support them as quickly as possible.”

Central Bedfordshire residents can find council tax arrears advice here. Practical advice on how to manage money and/or debt can be found here