Jane Tully, Director of External Affairs, Money Advice Trust.
The growing problem of local authority bailiff use
Council Tax arrears is one of the fastest growing debt types we hear about. More than one in four people (26%) we help at National Debtline have a Council Tax debt, a figure that has increased from just 14% a decade ago.
Bailiff action can cause serious harm to the wellbeing of residents, who are often in vulnerable situations, and can push people even further into debt. Research carried out by Money and Mental Health found that the action of creditors, including bailiffs, was “a significant part of the causal pathway” from financial difficulty to mental health problems. This is an issue we have been working with Money and Mental Health and nine other charities on through the sector’s joint Taking Control campaign.
Shouldn’t bailiff action be a last resort?
We know that local authorities are under enormous financial pressures to fund vital services. Recovering what they are owed, fairly and effectively, is an important part of this. However, bailiff action should only ever be used as a last resort and can be avoided by early intervention and agreeing repayment arrangements that are affordable and sustainable.
And yet, the findings of our new Stop The Knock research show that in 2016/17, local councils referred 2.3 million debts to bailiffs – an increase of 14% on the same research we carried out two years earlier. 1.38 million of these referrals related to council tax arrears, an increase of 10%. Almost two-thirds of all councils increased their use of bailiffs over the two year period – with 38 percent of councils actually managing to reduce their reliance on bailiffs during the same period.
As the figures suggest, debt collection practices vary greatly from area to area. Whilst it is positive to see that nearly four in 10 councils reduced their use of bailiffs, clearly much more needs to be done to support residents struggling to pay their council tax.
Improving debt collection
Alongside the research, we laid out six steps to help local authorities improve the way they collect the debts they are owed. These included: ensuring that residents in receipt of Council tax Support are exempt from bailiff action, that all councils have a formal vulnerability policy, and that they sign-up to the Citizens Advice and Local Government Association Council Tax Protocol. The protocol provides practical steps aimed at preventing people from getting into arrears in the first place.
And the good news is that many councils are working hard to improve. Over 50 councils have already signed up to the protocol, with a further 38 considering signing, and 97% already signpost residents to free debt advice. After sending tailored recommendations to around 300 council leaders regarding their authority’s figures, we have already received more than 70 responses so far, with more expected.
We hope that the findings presented in this new report will aid local councils as they seek to improve their debt collection practices, support the advice sector as we seek to bring about the changes that people in financial difficulty need, and ensure that bailiff action is one less cause of worry and stress for people in financial difficulty.