Latest Public Sector News

27.05.14

Households in council tax arrears increasing – Citizens Advice

Council tax arrears has become the number one debt problem faced by many households across the country, according to one charity. 

Between January and March 2014, Citizens Advice revealed that 27,000 people with a council tax arrears problem got help from the charity - a 17% increase on the same period last year. 

Up until this year credit card and unsecured personal loans were the most common types of debt people approached Citizens Advice about. 

Gillian Guy, Citizens Advice chief executive, said: “For some households council tax bills can be the tipping point that plunges them into debt. Last year over 90,000 people came to Citizens Advice looking for help with council tax arrears as they struggle in the face of low incomes, rising prices and reduced financial support. 

“Consumer debts like credit cards and personal loans have traditionally been the most common debt problems that come through our doors, but since the end of Council Tax Benefit we’ve seen council tax arrears problems go through the roof.” 

In April 2013, Council Tax Benefit was abolished and replaced by localised Council Tax Support. The support is available to people in and out of work, but levels now vary from one council to the next.  

As of March 2014, 244 councils out of 325 councils in England require all working age households to pay at least some council tax, regardless of income. In Wales most people who received Council Tax Benefit now receive help via the Council Tax Reduction Scheme, though for many this may not continue beyond March 2015. 

Local government minister Brandon Lewis, however, said that the government had delivered an 11% real-terms cut to council tax bills. 

Lewis said: “Council tax benefit doubled under the last administration costing every household £180 a year so welfare reform is a vital part of reducing the inherited deficit. Locally-designed council tax support gives councils stronger incentives to cut fraud and support people to get back into work.” 

He added that the latest official annual figures showed arrears were falling and that collection rates across the country now stood at 97.4%. 

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