Unpaid council tax court cases increase by more than 500,000

Approximately 500,000 more people were summoned to court last year over unpaid council tax, after the government scrapped council tax benefit (CBT), which protected many families from paying it. 

The Coalition abolished CBT in 2013, replacing it with a new council tax support scheme (CTS) administered locally with a 10% smaller budget. 

Most local authorities have passed the cut on to claimants in the form of a minimum council tax payment requirement for working-age households, regardless of whether or not they are in paid work. Only a small minority of local authorities kept full council tax support in place for those on low incomes. 

Research by False Economy – the TUC-backed anti-cuts campaign website – found that in local authorities with minimum payments, court summonses for non-payment of council tax increased by 30% last year. But the increase was only 9% in local authorities that still provided support for the full council tax bill. 

The research also found that CTS qualifying households subject to the new minimum payment rules accounted for 58% of the net increase in court summonses from 2013 to 2014. 

False Economy’s FoI requests also revealed that the use of direct deductions from benefits and earnings, as well as the use of bailiffs, is now widespread as a consequence of the liability orders the courts are issuing. 

Frances O’Grady, TUC general secretary, said: “Slashing council tax support has been one of the government’s cruellest cuts. It was foolish for ministers to think that families who can’t afford to heat their homes can pay new tax bills for hundreds of pounds. And it is heartless for them to stand by as the poorest families are hauled through the courts and harassed by bailiffs.” 

According to the Institute for Fiscal Studies, around 2.5 million low income households were hit by the resulting council tax rises in the first year of the minimum payment schemes. The average annual cost to households affected by the change in 2013-14 was reportedly £160. 

A Local Government Association spokeswoman said: “Many councils have introduced hardship funds or have changed the way unpaid tax is collected. Councils will work hard with residents to try to find a way to resolve the situation and only take legal action as a last resort.” 

But Chaminda Jayanetti, a researcher at False Economy, said that cuts to council tax support are leaving people out of pocket and in debt. 

“Councils are now pursuing people through the courts for money they do not have. It is a shambles made by a cabinet of millionaires in a government that has been completely out of touch with reality.” 

Local government minister Kris Hopkins MP defended the reforms to localise council tax support, saying that they had given councils stronger incentives to “support local firms, cut fraud, promote local enterprise and get people into work”. 

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