Poverty and Inequality

04.07.18

Calls for reform of local and central government’s ‘challenging’ debt collection

A shocking new report from Christians Against Poverty (CAP) has revealed that 41% of those helped by the CAP who had owed money to the central of local government were “more likely to have considered suicide as a way out of debt.”

The survey also found that, of those helped by CAP, 64% live below the poverty line and 55% have mental ill-health, with almost half of the people owing money to either the DWP, HMRC or their local authority.

The report calls for a “more consistent and coordinated approach” to those in hardship, and welcomes the government’s proposed statutory breathing space and debt repayment schemes as they provide the opportunity to provide consistency across the public sector for debt collection.

Debts owed to councils tend to be for tax arrears, housing benefit overpayment and fines; for central government, HMRC is mainly owed tax debts and credit overpayments, whereas the DWP is mostly owed benefit overpayment and Universal Credit advances.

Responding to CAP’s report, Cllr Richard Watts, chair of the LGA’s Resources Board, said: “Councils understand the pressures people on low incomes are under and will support people who are in financial difficulty wherever possible.

“Councils look to take steps to make sure that people in financial difficulty are supported, whether that’s through signposting to free debt advice, or through the joint Council Tax Protocol, which the LGA has developed alongside Citizens Advice to support those who are struggling.”

Watts noted that councils only ever take up debt collection as a final resort after encouraging people to apply for monetary support, making an effort to attach the debt to a salary or arranging a payment plan.

Watts continued: “No council wants to have to debt collect from its residents, particularly from people on low incomes, but local authorities have a duty to their residents to collect taxes which fund essential services, such as protecting vulnerable children, caring for the elderly, collecting bins, and keeping roads maintained.

“Anyone who is having trouble paying their council tax or bills should contact their local authority as soon as possible, for financial help and advice, and to discuss the options available.”

 

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