Big changes are coming that could mean far fewer people face unpayable council tax debt
It’s not the most interesting headline ever written, modernising council tax debt administration and enforcement. But behind the dry bureaucratese, big changes are coming that have just been announced because of a government consultation looking into council tax administration. Changes campaigned for and won by people in debt.
Our community groups chose this battle as a frontier in the unjust treatment of people in debt, fighting a system that is in equal measure cruel and archaic. Built in the wake of the poll tax protests, successive governments introduced and maintained a regime that treated anyone struggling with debt as deserving of the worst: fast escalation, punishing fees, relentless threats. Little has changed in the last thirty years.
Last summer, the government consulted on reforms, and we were overwhelmed with the response. Over 2,000 of our supporters fed into the consultation, including over 250 people who have faced the stress of unpayable debts. Two thirds of responses told them that current enforcement processes are not proportionate. And the government had no option but to listen.
So what’s actually changing?
From next year, councils must give 63 days notice before charging someone in arrears their full annual council tax debt, up from just 7 days. That means, rather than your debt jumping from hundreds to thousands of pounds after just one missed payment, people will now have at least three missed payments before being charged for the full year.
Billing will also shift from 10 to 12 months by default, making bills more affordable for many. Changes to the Severe Mental Impairment discount will make it less stigmatising and easier to access.
And the government has announced its intention to introduce a statutory pre-enforcement guidance, meaning councils will have to follow clear steps before escalating a debt to enforcement.
A fee limit of £100 on liability order charges (extra fees charged when a council gets a court order to recover unpaid taxes) will give people some protection from endlessly escalating costs, though we think that is still too high.
There’s still more work to be done.
Despite “considerable criticism [made] of the use of bailiffs in enforcing council tax debt” noted in the consultation responses, the government is taking no action on the bailiffs companies profiting from harassment and intimidation of people in debt. The regulation they point to will not fix this. Councils must see their powers to use bailiffs curtailed.
We’re also deeply disappointed the government has missed this opportunity to remove imprisonment as a sanction. As recent research from the debt advice charity StepChange shows, the threat of jail is deployed far more than its actual use warrants. This leaves people terrified of their councils, and continues to criminalise them simply for being unable to pay.
And none of this touches the underlying problem: council tax is an inherently regressive and unaffordable way to fund local services.
The government says reform is out of scope, but the problem is becoming unavoidable. Council tax debt is spiralling, £8.3bn at last count, and it will only grow as bills continue to outpace wages. That’s why we want the government to introduce a proportional property tax, which will mean 75% of households will pay less.
In the words of Jo, one of our group members and an anti-poverty campaigner:
“This is a testament to the tireless campaigning of people and activists across the country. This response is a good start, but the government must go further. We must see a total ban on the use of bailiffs by local government and a duty of care implemented that puts the needs of people in debt first and ensures accountability.”
We will continue to campaign for justice on these issues: for a ban on bailiffs in council tax debt collection, for councils that offer support not punishment, for a fairer system of taxation.
But in a world where wins can feel few and far between, it’s worth taking a moment to celebrate.
Together: our supporters, people in debt and allies across the sector – have forced a change that will make a real difference to the lives of 4.4 million people in council tax debt. Today, the world is a bit better because we took action and campaigned for change together.
