PayPlan welcomes new council tax arrears guidance, but also calls for further reform

Written by Hannah S on 2 September 2021

We welcome new Government guidance which asks local authorities to improve the way they collect council tax arrears and have more consideration for residents with vulnerabilities. But we also believe more should be done.

Alistair Chisholm, Head of Advice Sector Policy and Partnerships at PayPlan, said: “We’re delighted to see Government promote a more ‘human-based’ approach to the collection of council tax arrears, but more still could be done to protect residents – particularly those who are vulnerable.

“Council tax debts can be very difficult to sort out because the rules are dated and too harsh. Currently, residents can be taken to court after one missed council tax payment, and bailiffs are used far too often. This is out of step with the way banks and utility companies manage their debt collection.

“The new Government guidance has some very good practical examples of how councils can work with residents to resolve debt problem before taking them to court.  It’s also a very positive sign that some local authorities have decided things need to change – and that Government is now encouraging this.

“But Government has urged local authorities to improve council tax collection before.  In 2013 guidance was published that said a council should exhaust other options before going to court – but the very next year councils increased court action by 40-50%.

“This new guidance appears to be the start of gradual improvement – particularly for residents who live within the areas where authorities have committed to change. But what we really want is new rules for council tax collection.  We’d like to see an end to court action after one missed payment, and an end to the practice of insisting that debts are fully cleared before April.  Debts are more likely to be paid back if the payments are affordable and timescales realistic.

“English rules need to catch up with those in Wales where imprisonment for council tax debts was banned in 2019 – something which PayPlan and the Institute of Money Advisers has – and will continue to – campaign for. Wales statistics have shown that threats of prison are not needed to keep up council tax collection rates.  Prison should be for serious crimes, not unpaid local bills.”

The new guidance was published on 16 August 2021, and can be viewed in full here.

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This article was checked and deemed to be correct as at the above publication date, but please be aware that some things may have changed between then and now. So please don't rely on any of this information as a statement of fact, especially if the article was published some time ago.

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