New data released today shows council tax arrears have surged
past £6.5 billion, a new record high and an increase of more than
80 per cent since before the pandemic. New analysis by the
Centre for Social Justice (CSJ) reveals nearly 1.8 million adults
are now in council tax arrears, with a significant majority
facing serious personal and financial challenges.
The news comes in the shadow of the recent Spending Review and
warnings from the Institute of Fiscal Studies that council tax is
set to rise at its fastest rate for 20 years. Many councils are
planning annual increases of up to 5 per cent to address funding
shortfalls, despite a Government pledge not to increase taxes on
“working people”. In its new report, Vital Signs: Measuring
vulnerability in Council Tax Collection, supported by debt
collection company Lowell, the CSJ finds that:
- 97 per cent of those in council tax arrears exhibit at
least one sign of personal vulnerability (compared to 47 per
cent of the general population).
- People in council tax arrears are three times more likely to
be in poor health.
- They are twice as likely to have experienced negative life
events such as job loss, bereavement or relationship breakdown.
- Those who fall behind on council tax report experiencing
negative impact on their mental health (54 per cent), threats of
legal action (39 per cent), aggressive collection practices (24
per cent) and strain on relationships with family and friends (24
per cent).
The report also finds that the average amount of council tax debt
held by those seeking advice from debt charities has more than
doubled in a decade, from £756 in 2013 to £1,726 in 2023.
Matthew Greenwood, Head of Debt at the Centre for Social Justice,
said:
“With local government on its knees and council tax arrears at
record highs, those people who don't pay their council tax even
though they have the money should face the full force of the law.
But our report shows that the vast majority of those in arrears
are not refusing to pay – they're simply unable to, often due to
poor health, job loss or other negative life shocks.
“Under the current rules, missing just one payment can make
someone liable for the entire year's bill within weeks,
triggering bailiff action and, in some cases, threat of
imprisonment. It's an outdated, punitive system that fails to
distinguish between those who won't pay and those who genuinely
can't.
“The Government must now deliver on its pledge to end the
unfairness in council tax collection and help put millions on a
path to repaying their bills.”
John Pears, UK CEO at Lowell, said:
“This report highlights what we at Lowell have seen for some
time. Many people struggling with council tax debt are also
dealing with complex, often hidden, personal challenges. The
current system doesn't always allow for these realities. It can
make it harder for people to get back on their feet.
“The Government's recent commitment to reform bailiff oversight
is a welcome first step, but the work doesn't stop there.
Meaningful change is desperately needed to protect the most
vulnerable.
“It's not going to be easy, and councils can't do it alone.
That's why we're working with the CSJ, councils, MPs and debt
charities to drive reform, bring standards up across the country
and build a system that works for bill payers and councils
alike.”
Today's report comes alongside a Government announcement that it
will reform the way council tax is collected. The Ministry of
Justice also confirmed that the Enforcement Conduct Board – a
voluntary oversight body for the bailiff industry set up by the
CSJ – will be put on a statutory footing.
ENDS
Notes to Editors:
Click here to read
Vital Signs.
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