Outstanding council tax debt reaches £6 billion

^{19 June 2024}

Figures published today by the Department for Levelling Up, Housing and Communities (DLUHC) show outstanding council tax arrears have reached a total of £6 billion as of 31st March 2024, a 9% year-on-year rise and an 71% increase since before the pandemic – the total outstanding arrears stood at £3.5 billion in 2019 to 2020

Over the same period, the average amount of council tax arrears per StepChange client has risen by over 50% from £1,146 in 2019 to £1,726 in 2023.

As arrears rise, StepChange Debt Charity has raised concerns around some of the outdated and harmful collection practices employed by local authorities to recover debt.

This can include charging households for their full yearly council tax bill in a single payment, quickly appointing bailiffs to collect the debt, and in extremely rare circumstances, sending someone to prison for up to three months.

Around a third of clients who contact StepChange for help are in arrears with their council tax. The charity says that it can often be the most financially vulnerable who struggle to keep up with this bill and is calling on councils and Government to take a less punitive approach to collecting council tax debt and to offer more support for those who are struggling to pay.

New StepChange research conducted through YouGov, shows that the public also backs a fairer system for those in financial difficulty:

• More than 2 in 3 people (69%) support stopping councils using bailiffs for the recovery of council tax debts for those considered vulnerable
• More than two in three (69%) people support reducing council tax rates for people on the lowest incomes, funded by Government
• More than 4 in 5 (84%) people support the introduction of an independent statutory regulator which ensures bailiffs abide by rules to treat those in debt fairly
• Over 8 in 10 (82%) people oppose existing regulations around Council Tax which can require households to pay their annual council tax bill in full if they miss one month’s payment

StepChange is calling on the next Government to effectively regulate the bailiff industry, giving the existing industry regulator, the Enforcement Conduct Board, statutory backing to support the most vulnerable, stamp out bad practice, and improve standards.

Richard Lane, Chief Client Officer at StepChange Debt Charity, said:

“It is unsurprising that council tax arrears have risen as many local authorities have increased their rates by up to 5% to cover rising costs and obligations. Over the past few years, we’ve seen a rise in the number of people seeking help from StepChange who are struggling to keep up with essential bills like council tax, as inflationary increases prove unaffordable for those on lower incomes.

“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 which drives up standards and stamps out poor practice.”

Notes to Editors

1. DLUHC’s new stats on council tax arrears and collections can be found here.
2. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,116 UK adults. Fieldwork was undertaken between 8th – 9th May 2024. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+).