A mountain of unpaid council tax is owed to North authorities . . . amounting to a staggering £127million.
Despite many North councils facing severe financial hardship and axing hundreds of jobs, millions of pounds is still outstanding from those who have not paid their tax.
Concerns are growing that with so many people currently facing financial hardship, the current arrears situation will only get worse.
According to figures from the Department for Communities and Local Government, homes in Middlesbrough owed among the most on average, taking into account the number of households.
Calls were today made for a distinction to be made between those who are struggling to pay their tax – and those who deliberately avoid it.
Bosses at the region’s Citizen Advice bureaus say one in five people reporting debt problems to their service has a council tax arrears issue.
Figures show that between January and March this year, council tax debt was the number one debt problem the charity in the region helped with.
Gillian Guy, Citizens Advice chief executive, said: “For some households council tax bills can be the tipping point that plunges them into debt.”
Council bosses today said they are chasing the outstanding cash while at the same time offering support to those struggling to pay their bills. A Newcastle City Council spokesman said: “The amount outstanding that is owed to us is currently £12.2m – but these debts are more than a year old and in many cases go back as far as six years, and we have arrangements in place to collect some of this debt. We pursue people who refuse to pay these charges vigorously and only stop when it becomes uneconomical to do so.
“We have a statutory duty to collect council tax and business rates which are spent on vital services such as social care. Our collection rates are currently the highest of any core city and even higher than those of many smaller sized local authorities.
“Those who get into difficulties paying their charges should contact us as soon as possible so we can make alternative arrangements to help them pay and offer them advice.
“We also work very closely with the Citizens Advice Bureau and other voluntary sector organisations so those in genuine difficulties can get the help they need – but informing us of problems at the earliest opportunity is probably the most important thing a person can do and we actively encourage this.”
Jonathan Isaby, chief executive of the TaxPayers’ Alliance, said: “Councils need to be clear why they fail to collect so much in council tax, but it’s hardly surprising that some residents struggle to pay after a decade of hikes.
“Town halls need to differentiate between those who simply try to avoid paying and those who can’t afford to when dealing with cases. The latter should be helped with easier ways to pay, like Direct Debit, while the former should be pursued for outstanding bills.”
> Oh great – Direct Debit is not an easier way to pay if you’ve not the money to start with. But I suppose the kind of advice you’d get from a think-tank founded by a group of libertarian Conservatives.
Bosses at North Tyneside Council say their total arrears figure is “constantly shifting”, although as of the end of March this year it stood at £10.7million.
A spokesperson added: “The council’s overall collection rate for council tax, including arrears, is 99.2 per cent. We have prompt and effective collection strategies in place and balance this with support and assistance for those who may have difficulties in making payments.”
Stockton has arrears of more than £5m according to the figures.
David Harrington, Stockton’s cabinet member for corporate management and finance said: “We collected more than 98 per cent of all council tax in 2012/13 and in 2013/14, collected 96.9 per cent, which is still well above similar authorities.”
John Jopling, Gateshead Council service director for Customer and Financial Services said his authority’s charges for the year 2013-14, are still being collected.
He added: “It’s important to note that over the past two years there have been some significant changes to levels of council tax that is due to be paid. In Gateshead the level of support available for those on low incomes has been reduced, with some of the lowest income families now having to make a minimum 8.5 per cent contribution.
“This is as a result of the Government’s abolition of council tax benefit. Additionally, the council has also made changes to the levels of discount available on empty properties and second homes which have reduced exemption periods and charged premiums on long term empties.
“The effect of these changes is an increase in the amount of council tax due to be collected, which has increased by £4.3m or 5.5 per cent.”
A South Tyneside Council spokesman said: “We do all we can to maximise council tax collection rates, though recovery can take time and in some cases we are not able to recover the council tax debt in the financial year in which it is due. We currently collect around 98 per cent of overall debt.”
Source – Newcastle Evening Chronicle, 13 July 2014
This article was written by Hilary Osborne, for The Guardian on Sunday 25th May 2014
In the first three months of this year, the charity helped 27,000 people who had fallen behind with council tax bills, a 17% increase on the same period of 2013, and one in five of those reporting debt problems had an arrears issue. The charity said the increase had come in the wake of the abolition of council tax benefit in April 2013, and its replacement with new support from local councils. Levels of help vary from council to council, and as of March this year, 244 out of 325 councils in England required all working-age households to make some contribution, regardless of income.
The first wave of changes drove up the number of council tax arrears cases Citizens Advice dealt with to the point that they overtook problems with credit cards and unsecured personal loans for the first time.
Of those contacting the charity about council tax arrears, 42% were employed and 28% unemployed. The rest were full-time carers, or similar.
Of those seeking help with debt generally, one in five had problems with an unsecured loan and the same proportion had a fuel debt issue. One in six had problems with a credit or store card and 5% were behind on a mortgage or secured loan.
Gillian Guy, chief executive of Citizens Advice, said: “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.”
Guy said that for some households, council tax bills were the tipping point that plunged them into debt.
“Last year, more than 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,”
“As their budgets shrink, local authorities are increasingly stretched, but they must ensure that the resources available for their local council tax support scheme are focused on those who are most in need.”
The areas with the largest proportion of clients with council tax arrears were all outside London, and include Salford near Manchester, Stoke on Trent, Rutland and Redcar & Cleveland.
Local authorities can instruct bailiffs to recover unpaid bills or apply to have payments deducted from wages.
Source – Welfare News Service, 26 May 2014