Cash-strapped South Tyneside has the second-highest level of personal debt in England, a shock new report reveals.
Statistics show that 607 clients visited the borough’s Citizens Advice Bureau (CAB) between July and September last year, with debt-related concerns.
Concern over debt now accounts for a staggering 42 per cent of that bureau’s workload.
A new national CAB report also reveals that South Tyneside has the fourth-highest level of personal debt in England and Wales.
However, when two Welsh authorities are taken out of the equation, it emerges as the second worst debt-hit area in England – just behind Stoke-on-Trent.
Ian Thompson, chief executive of South Tyneside CAB, based at the Edinburgh Buildings in South Shields, revealed that priority debt, such as rent and Council Tax, had spiralled in recent years.
Meanwhile, advice workers are expecting a further surge in demand for the service this month as borough residents begin to count the cost of Christmas spending.
Mr Thompson revealed that debt-related problems are so great that some clients in the past have committed suicide as an escape from them.
The seriousness of the situation has led him to write a letter to every elected member on South Tyneside Council, outlining the situation and his concerns.
Mr Thompson said:
“We know there is an awful lot of debt in the borough.
“Forty two per cent of our work is working with clients with debt problems.
“That’s a staggering figure when you consider that we deal with a whole range of issues, ranging from employment to housing and much more besides.
“The sort of debt we are encountering has changed during my time with the bureau, from credit card debt and to priority debts, such as Council Tax arrears and rent arrears.
“These are life-changing, priority debts which can lead to people losing the roof over their heads.
“Unmanageable debt causes untold misery and can require the intervention of GPs for the treatment of depression.
“We have also had, as an extreme example, clients committing suicide because of the pressures they are under.
“From mid-January we are expecting a surge in the need for debt-related advice. Prior to Christmas, people tend not to think too much about debt – then the bills and credit card demands start to arrive.”
Top of CAB’s personal debt chart for England and Wales are two Welsh authorities – Denbighshire and Merthyr Tydfil.
In the North East the other worst-hit authorities are Darlington (5th), North Tyneside (8th), Gateshead (12th) and Middlesbrough (13th).
Source – Shields Gazette, 15 Jan 2015
Six of the country’s biggest “debt hotspots” are in the North-East, a report has revealed.
South Tyneside, Darlington, North Tyneside, Gateshead, Middlesbrough and Northumberland have some of the biggest clusters of people seeking help from Citizens Advice in England and Wales.
The charity dealt with 405 clients in Denbigshire between July and September – or 0.54 per cent of the adult population – making this area of North Wales the top debt hotspot.
South Tyneside was fourth with 607 clients seen (0.5 per cent); Darlington joint fifth with 410 clients (0.49 per cent); North Tyneside joint seventh with 776 (0.48 per cent); Gateshead 748 (0.46 per cent) and Middlesbrough 499 (0.46 per cent) in joint 11th and Northumberland in joint 15th place with 1,166 clients seen or 0.45 per cent of its adult population.
The charity, which has helped almost half a million people with debt over the last year, made the findings after analysing the cries for debt help it received over the three month period.
Citizens Advice said since the economic crisis, problems with consumer debt such as credit cards and personal loans have fallen significantly. By contrast, problems with “priority debts” such as rent arrears and council tax debts are growing.
Gillian Guy, chief executive of Citizens Advice, said:
“Times have changed, and so have people’s debt problems.
“Consumer debts like credit cards and personal loans have traditionally been the most common debt problems. But now priority debts such as council tax arrears are gradually building up as people struggle to cover everyday costs.
“In the past, people were more likely to get help for debt problems triggered by life events such as illness, redundancy or separation.
“But in recent years more people are being pushed into debt as they struggle to stretch their income to cover everyday living costs.”
Here are the biggest debt hotspots across England and Wales, according to Citizens Advice, with the number of people it helped between July and September, and also expressed as a percentage of the local adult population:
1. Denbighshire, 405, 0.54%;
2. Merthyr Tydfil, 248, 0.53%;
3. Stoke-on-Trent, 1,031, 0.52%;
4. South Tyneside, 607, 0.50%;
=5. Darlington, 410, 0.49%;
=5. Salford, 908, 0.49%;
=7. Copeland, 276, 0.48%;
=7. North Tyneside, 776, 0.48%;
=9. Mendip, 411, 0.47%;
=9. Liverpool, 1,793, 0.47%;
=11. Stevenage, 303, 0.46%;
=11. Gateshead, 748, 0.46%;
=11. Middlesbrough, 499, 0.46%;
=11. Torfaen, 330, 0.46%;
=15. Northumberland, 1,166, 0.45%;
=15. Lincoln, 348, 0.45%;
=17. Cannock Chase, 336, 0.43%;
=17. Barrow-in-Furness, 240, 0.43%;
=17. Hastings, 310, 0.43%;
=17. Sandwell, 1,015, 0.43%
Source – Northern Echo, 06 Dec 2014
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