English local authorities have been criticised for their overzealous debt recovery practices. In an article in July’s edition of “Local Gov”, the extent of the problem was highlighted, with council tax arrears accounting for no less than a third of debt issues which Citizens Advice deals with. This is a staggering figure, particularly when one considers that it exceeds credit card debt problems by 8%.
A significant issue is that local authorities have a legal obligation to collect council tax. However, the problem for individuals in arrears is that they not only have to pay the arrears, but also have to stump up bailiff fees and legal costs. This, of course, increases the debt quite substantially, with many people just seeing a downward spiral of debt from which there is no escape.
Whilst Parliament has said that they want to introduce reforms to allow for a less punishing recovery system, no timetable has been set for the introduction of new regulations which could address this. One council employee has said that the legal process is only used as a last resort, with pre-sue recovery measures, such as lettering, extensively being used prior to legal action being taken.
But with there being a recorded increase in council tax arrears (the problem has doubled in the last 10 years), the obvious question is why has the problem mushroomed? It seems that benefit cuts have been a major factor. In addition, a scheme intended to alleviate the problem may have unintentionally contributed to it. The "council tax support scheme" encourages those in arrears to make payment arrangements towards reducing their arrears. However, in some situations, if a person misses one instalment then the entire arrears become payable.
However, there is light at the end of this tunnel of debt, as local government has suggested the introduction of a council tax “recovery toolkit”. The intention here is for all local authorities to develop uniform policies on how to deal with the collection of arrears in a more sympathetic and pragmatic manner than is currently being experienced by some of society’s most disadvantaged. Whilst no date has been set for its introduction, there is a clear recognition that a problem does exist and that a solution has to be found. These steps must surely be welcome, although it could come too late for many who are in the current recovery system.
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