Key facts
- Council tax arrears across Britain have reached a record £8.3 billion.
- Arrears increased by 11% in the last financial year, totaling £802 million.
- England alone accounts for over £6.6 billion in council tax arrears.
- The government is consulting on reforms to the council tax system, including potential changes to billing cycles and bailiff use.
- A significant portion of those in arrears are on low incomes or living in poverty.
Council tax arrears across Britain have surged to a record high of nearly £8.3 billion, underscoring the severe financial strain on households amidst the ongoing cost of living crisis. In the last financial year alone, arrears increased by £802 million, an 11% jump from the previous year. Figures from the Ministry of Housing, Communities and Local Government show that arrears in England have surpassed £6.6 billion, with Scotland and Wales reporting £1.5 billion and £0.16 billion respectively.
This rise coincides with local authorities increasing council tax by the maximum 5%, pushing average Band D bills to £2,280. Additionally, over 200 councils have implemented double charges on second homes, resulting in bills averaging £3,672 for owners.
Research indicates that a third of individuals in arrears are living below the poverty line, and 79% fall within the bottom half of earners. Charities like StepChange Debt Charity and Debt Justice have criticized the current system, describing it as 'broken' and lacking compassion. They highlight that missing a single payment can lead to demands for the full annual amount and potential bailiff action, exacerbating financial difficulties for vulnerable individuals.
Polling suggests that 41% of those earning under £35,000 are concerned about meeting their council tax payments. In response to the growing crisis, the government has announced plans to consult on banning the use of bailiffs for council tax debt collection and reforming the system. Proposed changes include a potential shift to 12-monthly billing by default and providing more time for individuals to seek support.