Council tax debt owed to local authorities in the UK has climbed to £9 billion, prompting charities to call for urgent system reforms. The figures underscore a significant affordability crisis, with debt advisors reporting that a substantial portion of individuals seeking assistance are behind on this specific bill.
Vikki Brownridge, chief executive of the debt charity StepChange, stated that their advisors are acutely aware of the depth of the council tax affordability crisis. "With one in three of those coming to StepChange behind on this bill, these latest figures are no surprise to us and point to a system that perpetuates debt with little to no constructive route out," she said.
Charities are urging individuals experiencing financial difficulties to investigate their eligibility for council tax discounts and support programs. These can vary by local council but may include a 25% reduction for single-occupant households, full exemptions for full-time students, or the possibility for individuals with disabilities to apply for a lower council tax band. Support for low-income households is available through Council Tax Support, though an application is required.
Organizations like the National Debtline are also advocating for increased funding for local authorities to provide more consistent support. They argue that the current system, which often involves bailiffs and threats of court action or imprisonment for non-payment, discourages people from seeking help. Charities contend that such aggressive tactics can exacerbate debt issues.
In response to these challenges, the government published proposals in April to reform the council tax collection system in England. Key changes include extending payment options from the current 10 installments to 12 months annually. Under the proposed reforms, households struggling to pay would be granted 63 days, approximately two months, to settle their bill. Councils would also be mandated to work with these individuals to establish sustainable repayment plans, a departure from current practices where some councils demand the full year's payment after a single missed installment. These changes are anticipated to be implemented as early as next year.