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Council Tax bullying to end


Council Tax bullying to end

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The UK Government has announced it intends to radically overhaul how Council Tax debts are collected across England.

The new initiative comes after two local authorities in England have demonstrated that by taking a more compassionate approach to how Council Tax debts are recovered, they are now more effective in recovering debt, than those Council’s that use the traditional approach of threatening people with bailiffs.

The two local authorities, St Albans, and North Warwickshire have demonstrated their new compassionate approach has seen collection rates rise, and as a percentage, both now have higher than national average collection rates.

They also have collection rates that are higher than any local authority in Scotland.

In 2017-18, in England, £28 billion was collected in Council Tax; in Scotland, the figure was £2.2 billion, whilst in Wales, it was £1.45 billion.

However, in 2017-18, the national average collection rate in England was 97.1%; whereas in Wales the average was 97.4%; but in Scotland, the average collection rate was only 96%.  Over the same period, St Albans Council collected 98.9% of the Council Tax that was billed, whilst in North Warwickshire, 98.6% was collected.

What are they doing differently?

What appears to be different about the new approach that has been taken by St Albans and North Warwickshire Council is they are both forging stronger connections with their local debt advice agencies and working alongside other financial inclusion partners to help those that are struggling with debts. They are making sure people are getting the help they need.

Staff now proactively refer residents who are struggling onto debt advice agencies and don’t just issue Liability Orders, which allow Councils to recover debts, unless payments are missed for 12 months or multiple repayment arrangement are broken.

Instead of Liability Orders being the first step in recovering debts, they are now seen as a last resort.

Affordability assessments are now also key to how the debts are recovered, so the emphasis is placed on looking at what people can afford, rather than just how much debt collections services can extract from them.

In North Warwickshire, for example, this led to 60% fewer cases being referred to bailiffs in 2017-18, than was referred to in the previous year.

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A New National Approach to Council Tax Debt Recovery

Speaking about the new approach to Council Tax Debt recovery, Local Government Minister, Rishi Sunak, MP, has said:

“The experience of some innovative councils show that Council Tax collection rates can be improved without resorting to the unfair treatment of vulnerable people”

“That’s why I’m pushing forward work to make the Council Tax collection system fairer and more efficient – so people are treated with compassion while services get the funds they need”.

The Minister has now committed to bringing forward new guidance to improve how local authorities recover unpaid Council Tax with a view to ending the aggressive enforcement tactics that have been so controversial in the past.

It is believed this may mean:

  • ensuring affordability assessments become central to Council Tax collection and take into consideration people’s individual circumstances, giving them time to pay off arrears;
  • improving the links between councils and the debt advice sector; and
  • developing fairer debt intervention methods.

Cross Government Approach to Vulnerable People with Debt

The new initiative that is being taken by the Ministry of Housing, Communities & Local Government is also only part of a new wider cross-Government approach that is being taken to help people struggling with debt.

Other steps that are being taken will include:

  • A new breathing space scheme that will be designed to give people legal protection from bailiffs and allow them time to get advice and information;
  • A new statutory repayment plan, based on the Scottish Debt Arrangement Scheme, that will allow consumers the time they need to repay their problem debts; and
  • A new review by the Ministry of Justice of the powers bailiffs have in England, Wales, and Northern Ireland.

Ending Bad Practice by Councils and Bailiffs

The new initiative comes against a backdrop of rising concerns about how local governments are behaving as debt collectors.

Last year the House of Commons powerful Treasury Committee criticised Councils for “overzealously” using bailiffs and unnecessarily driving vulnerable consumers into further difficulty.

Whilst a recent report of the House of Commons Justice Committee not only called for tougher regulation of bailiffs but also called for bailiffs to wear body cameras to stop bullying behaviour.

If you are struggling with council tax, or other problem debts, obtaining advice is the most effective way to protect yourself and your family.

Make sure you don’t become the victim of bullying behaviour, speak with one of our expert advisors, for free on 0808 2234 102.

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