Menu
Save, make, understand money

Household Bills

Households ‘unsurprisingly’ in £6bn of council tax arrears

Households ‘unsurprisingly’ in £6bn of council tax arrears
Matt Browning
Written By:
Matt Browning
Posted:
19/06/2024
Updated:
19/06/2024

Households in England were in £6bn of council tax arrears in the 12 months leading to March this year, Government figures show. 

Debt levels for the tax have risen 71% since before the pandemic and marked a 9% rise last year, according to the Department for Levelling Up, Housing and Communities (DLUHC).

The £6bn total is a cumulative figure that takes into account previous arrears that could go back a number of years.

It follows the average council tax amount rising by £106 to an annual cost of £2,171 for homes in England, which has caused it to be the most common concern among callers to National Debtline.

Some 30% of all callers to the charity had council tax arrears in May this year.

The average amount owed in council tax debt is £1,762 for those who called the debt advice charity, a rise from £1,181 in 2019, before the pandemic.

‘Urgent action needed on collection practices’

Steve Vaid, chief executive of the Money Advice Trust – the charity that runs National Debtline – said the level of council tax arrears is “on a worrying upward trend”, and he called for urgent action on collection practices.

Vaid said: “Councils have a vital role in helping residents with unmanageable bills and to ensure council tax, crucial to funding local services, is collected in a way that is fair and affordable.

“Reforming collection practices should be a priority for the next Government, including putting an end to people becoming liable for their full annual council tax bill after falling behind.”

‘Bailiff action makes matters worse’

The sentiment was echoed by Richard Lane, chief officer at fellow debt charity StepChange, who believes the number of council tax arrears isn’t surprising.

Lane said: “Due to current council tax collection practices, these increases may mean more households face bailiff action as local authorities look to recoup unpaid debts.

“Our insights and research have consistently shown that bailiff action can cause increased harm to those in vulnerable positions and can make existing debt problems worse.

“That’s why we are calling on all parties and the next Government to introduce a statutory regulator for the industry, one [that] drives up standards and stamps out poor practice.”

Nearly all authorities raised council tax last this year

In February, 95% of the 136 local authorities in England announced their intention to raise council tax by the maximum possible 4.99%, according to the County Councils Network (CCN).

Explaining the decision for this year, councillor Sam Corcoran, vice-chair of the CCN, said: “This year, councils have faced extreme financial pressures, with local authorities having to make some of their toughest decisions ever due to rising costs and spikes in demand for care services.”

Corcoran added: “No council leader takes the decision to raise council tax lightly, as we know this will add to the cost of living for residents, but councils have had little choice but to put up council tax due to the increased demands, particularly in children’s services.”