Councils urged to stop 'escalating harsh tax collection practices too quickly'

Updated

Citizens Advice has seen a surge in cries for help with council tax debts, and said "harsh" collection practices were making some people's problems worse.

Between April 2015 and March 2016, Citizens Advice helped people with 196,000 council tax debt problems in England, making it the number one debt issue for the charity.

Citizens Advice has seen a 33% increase in requests for help with council tax debts over the last three years, at a time when queries about other types of debt have been falling.

It is urging more councils to stop a practice whereby people who miss a monthly council tax instalment are forced to pay the remaining annual cost in one go.

The use of bailiffs and court action are also making the costs balloon for those already in financial difficulty, the charity said.

In one case seen by Citizens Advice, someone who contacted the charity for help had a £27 debt which jumped to £417 after council officials charged fees for obtaining a court order and calling bailiffs. Citizens Advice wants more councils to offer affordable repayment plans.

Citizens Advice asked 1,100 people in England with council tax debt about their experience.

Nearly two-thirds (65%) of those surveyed were working. More than half (55%) said a general lack of money meant they had fallen behind, while 30% said their wages had fallen, for example through reduced working hours or redundancy, and 25% said they had had cuts to benefits or tax credits.

The charity's report said: "Some councils are escalating harsh collection practices too quickly".

More than half (54%) of people surveyed said the council's actions made it harder to clear their debts and more than seven in 10 (71%) said they had extra charges added to their bill.

Nearly half (48%) had been visited by a bailiff and less than a third (30%) were offered an affordable repayment plan.

Some 46% of people also said authorities stopped allowing them to pay their council tax by monthly instalments and asked for the remaining costs for the year in one go.

Citizens Advice said some local authorities had introduced better collection practices. For example, some councils use in-house bailiffs who ask debtors about their financial situation, check they are claiming benefits available to them and refer them to free debt advice. Other councils will refund some extra charges if someone sticks to an agreed repayment plan.

Gillian Guy, chief executive of Citizens Advice, said: "Some councils are too quick to crackdown on people falling behind on council tax.

"Of course it's right people should repay their council tax - but calling in bailiffs, adding on extra charges or forcing someone to pay the rest of the year's council tax bill in one lump sum can make the situation worse for everyone.

"Some councils have developed much fairer approaches to collecting debt and as a result get money back much faster.

"Even simple steps, like improving communication and offering a realistic repayment plan, can ease the strain on debtors and ensure councils get what they're owed.

"It is really important councils review their debt collection practices to make sure they are helping people to overcome their debt problems rather than making their financial problems worse."

A spokesman for the Local Government Association (LGA) said: "Councils have a duty to their residents to collect taxes so important services are not affected.

"But we realise that times are tough and do their best to protect those affected the most, whether through introducing hardships funds or taking a sympathetic and constructive approach to the way we collect unpaid tax.

"We agree that bailiffs should only ever be used as a last resort. Before the situation reaches a stage where bailiffs are involved several letters should have been written, people should have been encouraged to apply for financial support, and efforts should be made to arrange new payment plans or to attach the debt to a salary.

"We have worked closely with Citizens Advice on a protocol for councils using bailiffs when recovering debts. It includes the need for fair collection and enforcement policies and the ability for councils to take back cases involving vulnerable families."

A spokesman for the Department for Communities and Local Government said: "More than 97% of council tax is collected with the vast majority of people paying their bills.

"We have also made it easier for households to pay their bills in monthly instalments and published guidance to stop bad practices from aggressive bailiffs.

"However, every penny of council tax that is not collected means a higher bill for everyone in the area so we expect councils to be sympathetic to those in genuine hardship, but take appropriate action to chase up outstanding debts."

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