Councils are stressing household finances to their limits during COVID

Brand new data obtained by debt help website www.DebtBuffer.com using Freedom of Information requests reveals the shocking state of household debt in England & Wales going into the COVID-19 crisis, and how aggressively many councils are using Bailiffs to claw back overdue debts from financially stressed residents.

• Up to 31% of households in England & Wales have been issued a Court Summons for unpaid Council Tax

• Councils across England & Wales issued over 2.23million Council Tax Court Summons.

• Over 1.092million Liability Orders were issued by the courts allowing Councils to appoint Bailiffs.

• Over £164.4million was collected by the use of Bailiffs.

• 113 Councils have already recommenced enforcement action to claw back council tax debts.

243 Local Authorities across England & Wales have responded to the request and the data paints a pretty clear picture of where in the UK entered this COVID-19 crisis already on the back foot with residents enduring aggressive enforcement action for Council Tax debts. DebtBuffer has taken the information gathered from the 243 councils and merged this with ONS and Insolvency Service data to map the Council Tax crisis across England and Wales: https://www.debtbuffer.com/council-tax-compared/

The data revealed by DebtBuffer.com shows that Councils issued over 2.23million Council Tax summons for the 2019/2020 Financial year. However, whilst the number of Summons that councils are issuing is interesting, its only when you take into account the number of households a council is responsible for does the data truly show the extent of how bad a problem council tax arrears are in some locations.

The top 10 local authorities with the most amounts of households being served council tax summons all show at least 20% of their residents being in arrears for the year. The average for the top 10 sits at 25% of households with the highest percentage being taken by residents of Middlesbrough with over 31% being in council tax arrears.

Tom Johnson, Managing Director of debt help website DebtBuffer.com, said:

“This new data shows the enormous scale of council tax arrears even before COVID-19 struck. The economic impact of the lockdown means many more households will have fallen behind financially. Potentially, millions of households are at risk of falling further into financial difficulty, especially if councils pick up where they left off and make heavy handed use of Bailiffs to claw debts back.”

DebtBuffer reveals that Bailiffs have recouped an eye watering £164million for councils in England & Wales for the financial year 2019/2020. So far over 113 Councils have recommenced enforcement action for households who owe council tax debts. 119 Councils still have the situation under review.

Of the 243 Councils who replied to the Freedom of Information request, Ashfield District Council tops the league for the most aggressive Enforcement action using Bailiffs with £1213 being recovered per Liability Order granted. Haringey, which tops the national table for most revenue collected via Bailiffs with nearly £15million, comes in a close second place with £1119 per Liability Order being collected. For context, across England and Wales, from the data provided by the councils, the average revenue collected by Bailiffs per Liability Order sits at just £159.

Tom Johnson, Managing Director of DebtBuffer.com also commented: “Households that went into the lockdown already owing tax will be the first households to feel the sting in the tail of renewed enforcement action by councils up and down the country. It would be useful for many, if the Government stepped in to change how Councils are able to collect Council Tax debts. The current system of issuing Court Summons and moving straight to enforcement is brutal when compared to other types of debt like credit cards that allow far more time to pay before legal enforcement begins. It would be helpful for new collections protocols and more lenient time to pay arrangements to be introduced to help households better cope with this incredible financial situation many are now facing.”