More than 2.7 million debts were referred to bailiffs by local authorities in England and Wales during the 2022/23 financial year, according to new research conducted by the Money Advice Trust, the charity that runs National Debtline, and the Centre for Social Justice think-tank.
The findings, based on Freedom of Information requests to local authorities, form part of wider research into council tax debt and collection practices published by the Centre for Social Justice, which reveals that 1.3 million households fell behind on their council tax bill in 2022/23.
The findings show that local authorities in England and Wales passed 2.71 million debts to bailiffs during the 2022/23 financial year – broadly unchanged on pre-pandemic levels (2.65 million in 2018/19). Referrals to bailiffs comprised of 1.3 million council tax debts, compared to 1.4 million in 2018/19. Parking debts increased to 1.2 million from 1.1 million in 2018/19. There was almost 127,000 other debts, including Housing Benefit overpayments, business rates and commercial rents.
While a majority of local authorities have decreased their use of bailiffs overall, the research found only limited improvement in debt collection practices in recent years with six in 10 councils (59 percent) where a comparison was possible between 2018/19 and 2022/23 had decreased their use of bailiffs, with 4 in 10 increasing their bailiff use as practices continue to diverge.
Only 31 local authorities – less than 10 percent of the total – have a policy of exempting people receiving local Council Tax Support from bailiff action, despite those residents having already been identified as vulnerable. Fewer than half of councils (48 percent) reported having a formal vulnerability policy in place – a fall of 11 percentage points from 2018/19.
While councils are under significant financial strain, the Centre for Social Justice report reveals that 1.3 million households, many of whom are on low incomes, are already behind on their council tax bills. Council tax arrears reached record levels in March, standing at £6.2bn in England and Wales, according to the latest Government figures.
The Money Advice Trust is calling on the Government to provide more support for councils and households struggling to pay their council tax by:
Introducing ring-fenced funding for all local authorities in England to provide 100 percent Council Tax Support to households on the lowest incomes (as is already the case in Wales), to prevent people falling into council tax arrears.
Giving statutory powers to the Enforcement Conduct Board, to provide independent regulation of the bailiff industry for the first time.
Extending the Household Support Fund, which has provided crucial wider support to households on the lowest incomes through the cost of living crisis, beyond September.
The charity is also urging all councils to adopt its six steps to improve collection practices, including exempting residents who receive Council Tax Support from enforcement action altogether.
Steve Vaid, Chief Executive of the Money Advice Trust, the charity that runs National Debtline, said “Local authorities across the country remain under significant financial strain and council tax collection plays a crucial role in funding vital local services. But with more than 1.3 million people struggling with council tax arrears, the scale of the use of enforcement agents by councils remains far too high.
“Facing bailiff action can be a deeply distressing experience, and risks pushing people who are already struggling into further financial difficulty. We need urgent action from central and local government to address this problem.
“The new Government could help by introducing ring-fenced funding to enable all councils to provide 100 percent Council Tax Support to households on the lowest incomes. And all local authorities should commit to taking active steps to improve their debt collection practices, so that fewer debts need to be passed to bailiffs in the first place.
“While progress has been slow, more and more local authorities are understanding the need for change. We will continue to work with councils to help them improve their practices – and our National Debtline advisers are here to help with free, independent advice for anyone struggling with their finances.”
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