The StepChange debt charity is pushing for immediate action from both the government and local authorities to overhaul the way council tax debt is collected. The charity argues that the current system is causing undue harm to individuals who are already struggling financially. They highlight that council tax debt collection practices are contributing to negative impacts on people’s health, wellbeing, and even their personal relationships, creating a cycle of stress and difficulty for those in debt.
One of the key concerns raised by StepChange is the lack of consistent, binding standards across local authorities to help those in financial difficulty. Without national guidelines in place, the level of support varies greatly depending on where someone lives. This inconsistency results in what the charity calls a “postcode lottery,” where some councils may offer more lenient support, while others escalate collection efforts more aggressively, leaving many people with limited or no help.
The charity also points out that the current rules can escalate the situation alarmingly fast. If a person misses just one council tax payment, they can quickly find themselves facing demands to pay the entire annual bill in full. This can happen within a matter of weeks, putting immense financial pressure on people who are already struggling to make ends meet. The rapid pace of escalation often leaves individuals with little time to recover or negotiate, worsening their financial difficulties.
In addition to the demand for immediate full payment, those in arrears may be faced with threats of legal action, including imprisonment. Such threats can be overwhelming and contribute to heightened levels of stress and anxiety. Many individuals in debt are already dealing with other financial issues, and the added pressure from council tax demands can push them further into hardship.
StepChange also highlights the frequent use of bailiffs to recover unpaid council tax. The involvement of bailiffs not only adds more pressure but also leads to additional fees, which can quickly accumulate and significantly increase the total debt owed. This aggressive approach to debt collection often worsens the financial situation for those who are already vulnerable, making it even harder for them to get back on track.
StepChange reports that aggressive council tax collection methods are widespread and often harm the most vulnerable households. According to their research, the rising burden of council tax, combined with the way it’s collected, frequently worsens people’s debt issues. Many are forced to make difficult decisions, choosing between paying for essentials like utility bills, rent, mortgages, or maintaining a healthy diet, in order to stay on top of council tax payments.
The report even says some people are unable to leave, yet scared of a knock at the door:
StepChange has reported a sharp rise in council tax arrears among its clients and across the UK, driven by ongoing cost-of-living pressures. Recent YouGov polling shows that 6% of UK adults have fallen behind on their council tax payments over the past year. StepChange’s analysis estimates that this affects over 3 million people, with the average council tax arrears per client rising to £1,726 in 2023, a 50% increase from £1,146 in 2019. Additionally, figures from the Ministry of Housing, Communities, and Local Government show that unpaid council tax reached £6 billion last year, marking a 46% rise since 2018-19.
StepChange argues that current regulations push councils to escalate debt quickly, often through aggressive enforcement tactics that worsen financial difficulties. Only 5% of those surveyed said their council took personal circumstances, including vulnerabilities, into account before taking further action. A significant portion of clients (34%) who entered repayment plans found they were unable to keep up with payments, adding to their distress.
The charity also highlighted issues with council communications, which frequently discourage people from seeking support. Over 85% of clients surveyed said the correspondence from their councils regarding arrears made them feel scared, anxious, or depressed, worsening their overall situation.
Enforcement actions, particularly the use of bailiffs, are often employed in cases involving vulnerable individuals. Over half of those surveyed (53%) who experienced bailiff visits reported feeling pressured to make unaffordable repayments, while 34% described the behaviour of bailiffs as intimidating or aggressive. The impact of these actions was severe, with 95% of clients reporting negative effects on their mental health and 91% on their physical health, as well as 94% noting difficulties with sleep due to the stress caused by enforcement measures.
StepChange is urgently calling on the government and local authorities to take three steps:
- The government should prioritise making council tax more affordable by increasing funding for council tax support, particularly for those who are unable to pay.
- National regulations and guidance need an overhaul to stop the harmful demands for immediate full repayment and the threat of imprisonment. There should be binding standards that focus on helping those struggling to agree on repayments, ensuring that enforcement is used only as a last resort.
- A statutory regulator for the bailiff sector should be established to address poor conduct. This can be achieved by putting the Enforcement Conduct Board on a statutory footing.
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