Councils sent 2.3 million debts to bailiffs in 2016/7

Councils are using bailiffs more frequently to collect council tax arrears, parking tickets and other debts. Money Advice Trust has collected figures from councils across the country that show:

• councils referred 2.3 million debts to bailiffs in 2016/7
• this is an increase of 14% on 2 years ago and c. 30% on 4 years ago.

You can see individual council details using the map at #stoptheknock. There is a very wide variation between councils. 38% of councils are using bailiffs less than two years ago.

Take a couple of London Councils who probably have pretty similar demographics and parking problems:

• Lambeth instructed bailiffs on 71,869 occasions in 16/17 – an increase of 324% since 2014/15. A lot of these were for parking, but bailiff use to collect council tax went up by 32%;
• Hammersmith & Fulham instructed bailiffs on 20,697 occasions – a decrease of 17% since 2014/15.

Council tax arrears and parking tickets

Various types of debts owed to a local authority are sent to bailiffs, but the main types by number are council tax arrears and parking tickets.

Collecting parking ticket debts can be hard as the debtor often lives outside the borough and the council knows nothing about them or their circumstances. London boroughs have significant parking problems, but this doesn’t account for the huge disparity in the use of bailiffs between areas.

However the situation is very different for council tax arrears, which the rest of this article looks at.

Use of bailiffs adds large charges

In 2012 the benefits rules were changed, so that many people out of work had to pay a small amount of council tax for the first time. The result has been increasing numbers of people with council tax arrears. On a single day in 2013 Southwark Council issued a summons to 4,500 people for council tax arrears.

These council tax arrears are often for low amounts. The council adds costs for the summons and liability order and then bailiffs costs transform a previous problem debt into something impossible to manage. So someone who was out of work and finding it difficult to pay £9.50 a month council tax can find that their council tax arrears of less than £100 jump to over £500.

Of course they “should” have got in touch with the council earlier, well before the bailiffs stage, to explain their problem and try to get an agreement on what they can pay each month. But many people don’t:

• the letters from the council are scary, saying they have to pay the full amount now or they may be taken to court;
• they have debt collectors phoning and these debts can seem more urgent;
• they aren’t good at handling letters because English isn’t their first language or they have literacy problems; or
• they have mental health problems which makes it hard for them to concentrate or take good financial decisions.

Council treat each financial year as a separate debt, so it’s common for a resident to find the council has applied for two or more liability orders for different years within a few weeks. This maximises the extra costs and can cause much confusion, as the letters from the bailiffs don’t tend to state what year the debt relates too, so people can be unaware they have more than one debt.

“Good practice” council tax debt collection

Commenting on the new 2016/7 bailiff statistics, Joanna Elson, CEO of the Money Advice Trust, said

Many councils are far too quick to turn to bailiff action – which we know can seriously harm the wellbeing of residents who are often already in vulnerable situations. It can also push people even further into debt.

Bailiff action should only ever be used as a last resort, and can be avoided by early intervention, making sure residents get the free debt advice they need, and agreeing repayment arrangements that are affordable and sustainable.

There are good alternatives to sending in the bailiffs. In 2009 Citizens Advice and the Local Government Association developed a Collection of council tax arrears good practice Protocol which has been revised in 2017. This has practical points about how to prevent arrears arising in the first place. After a liability order has been issued, it says:

Local authorities should prioritise direct deduction from benefits or attachment of earnings in preference to using [bailiffs]. This avoids extra debts being incurred by people who may already have substantial liabilities.

 

This article was updated in November 2017.

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