Council tax arrears problems soar

4 May 2016

Local authorities shouldn’t be able to pass council tax debts on to bailiffs for the most vulnerable people, say two leading charities, as arrears problems soar.

StepChange Debt Charity and the Money Advice Trust say they are concerned that the increasing use of bailiffs is creating additional stress and anxiety, prompting people to take decisions that can deepen their financial problems. 

Mike O’Connor, chief executive of StepChange Debt Charity, says: “This counterproductive approach needs to stop immediately and be replaced with one that is fairer and more constructive. It is up to both central and local government to implement systems that both incentivise affordable repayment and support those in financial difficulty”.


The Money Advice Trust says 2.1 million debts were passed to bailiffs by local authorities in 2014/15 - of these, 1.27 million referrals related to Council Tax arrears.

Meanwhile analysis of StepChange’s clients found that in 2015, 30% were in council tax arrears – up from just 14% in 2011. The average council tax arrears also rose, from £717 in 2011 to £961 in 2015 – a 25% increase.

Figures from National Debtline, the free advice service run by the Money Advice Trust, show a similar trend – with just 14% of callers in arrears on Council Tax in 2007, rising to 25% last year.

A small number of councils in London; including Islington, Bexley, Brent and Southwark, have now adopted a policy of ruling out bailiff action in cases where the resident is in receipt of Council Tax Support. The Money Advice Trust and StepChange Debt Charity believe that this approach should be adopted nationwide.


Joanna Elson OBE, Chief Executive of the Money Advice Trust says: “Bailiffs should only ever be used as a last resort – and they shouldn’t be used at all in the case of recipients of Council Tax Support, who councils have already identified as requiring additional help to keep on top of their finances.

The charities are calling for a statutory ‘Breathing Space’ scheme that guarantees those seeking debt advice a temporary freeze on interest, charges and a halt to enforcement action in order to help a person recover their financial situation. Where people can repay their debts in an affordable and sustainable way, these protections should continue.


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