This week the Martin Lewis charity – the Money and Mental Health Policy Institute – said that council tax debt collection practices are “so aggressive” and compared them to a “caricature of the worst loan sharks”
This week Martin Lewis hit out at councils for their “grotesque” treatment of people who have council tax debt.
This week the Money Saving Expert (MSE) founder’s charity – the Money and Mental Health Policy Institute – said that council tax debt collection practices are “so aggressive” and compared them as a “caricature of the worst loan sharks”. In particular, it focused council’s use of bailiffs when collecting council tax arrears.
The charity highlighted that if someone missed just one council tax payment, then within three weeks they could be hit with notice which requires you to pay your yearly council tax bill upfront within seven days. For an average UK household, this could brutally mean a missed £140 payment results in a £1,668 bill just three weeks later. According to Martin’s charity, a large number of councils are then turning to debt collectors and bailiffs to get this money.
According to the Centre for Social Justice (CSJ), total council tax debt currently stands at £6billion and around 1.3million households in England and Wales were visited by a debt collector last year, research by the Money Advice Trust shows. The number of people referred to debt collection agencies varied significantly by council, according to the latest data for the year to April 2023.
The London Borough of Croydon referred the most, with bailiffs sent to 36,122 customers with council tax arrears, followed by Barnet Council referred 34,956 customers, and Lambeth 29,629. Overall, Croydon made 86,295 bailiff referrals across the year. Liverpool referred the most customers outside of London at 27,435 with 38,793 overall bailiff referrals, and Somerset – now includes Mendip, Sedgemoor, Somerset West, Taunton, and South Somerset – made 24,587 referrals.
You can find out how many times your local council referred bailiffs between 2022 and 2023 in our interactive map below.
The Money Advice Trust noted that areas with larger populations and higher levels of deprivation tend to use more bailiffs as a result. Just 15 out of the 319 English and Welsh local authorities referred no customers in council tax arrears to debt collection agencies in 2022/23 and these included:
- Bexley
- Boston
- Bracknell Forest
- East Staffordshire
- Epping Forest
- Gosport
- Gwynedd
- Hackney
- Hammersmith and Fulham
- Isles of Scilly
- Kensington and Chelsea
- Newham
- North Warwickshire
- Redcar and Cleveland
- South Holland
- West Lancashire
For example, Hammersmith and Fulham Council have completely eradicated the use of bailiffs when recovering unpaid council tax and instead step in and offer support when people start to fall behind. The Money Advice Trust found that only around half (48%) of all English and Welsh councils have a formal policy in place to recognise and assist residents in vulnerable circumstances.
These policies include things such as giving more time to repay, referrals to wider support services or pausing chasing the debt. However, all councils say they refer those in debt to charities for help such as the Citizens Advice Bureau and debt charity StepChange.