The Martin Lewis charity – the Money and Mental Health Policy Institute – said that council tax debt collection practices are “so aggressive” and compared them to a “caricature of the worst loan sharks”
Martin Lewis’s charity has slammed councils for their “grotesque” handling of people with council tax debt.
The Money and Mental Health Policy Institute criticised council tax debt collection practices for being “so aggressive”, likening them to a “caricature of the worst loan sharks”. The charity, set up by Money Saving Expert (MSE) founder Martin, particularly took issue with the use of bailiffs by councils when collecting council tax arrears.
It pointed out that if an individual misses just one council tax payment, they could receive a notice within three weeks requiring them to pay their annual council tax bill upfront within seven days. For the average UK household, this could mean a missed £140 payment results in a £1,668 bill just three weeks later.
According to Martin’s charity, many councils resort to debt collectors and bailiffs to recover this money. The Centre for Social Justice (CSJ) reports that total council tax debt currently stands at £6 billion.
Research by the Money Advice Trust shows that around 1.3 million households in England and Wales were visited by a debt collector last year. The number of people referred to debt collection agencies varied significantly by council, according to the most recent data for the year to April 2023.
The London Borough of Croydon topped the list, sending bailiffs to 36,122 customers with council tax arrears, followed by Barnet Council with 34,956 referrals, and Lambeth with 29,629. In total, Croydon made a staggering 86,295 bailiff referrals throughout the year.
Outside of London, Liverpool referred the most customers at 27,435 with an overall 38,793 bailiff referrals, while Somerset – which now includes Mendip, Sedgemoor, Somerset West, Taunton, and South Somerset – made 24,587 referrals.
You can find out how many times your local council referred bailiffs between 2022 and 2023 in our interactive map below.
The Money Advice Trust noted that areas with larger populations and higher levels of deprivation tend to use more bailiffs as a result. Just 15 out of the 319 English and Welsh local authorities referred no customers in council tax arrears to debt collection agencies in 2022/23 and these included:
- Bexley
- Boston
- Bracknell Forest
- East Staffordshire
- Epping Forest
- Gosport
- Gwynedd
- Hackney
- Hammersmith and Fulham
- Isles of Scilly
- Kensington and Chelsea
- Newham
- North Warwickshire
- Redcar and Cleveland
- South Holland
- West Lancashire
For example, Hammersmith and Fulham Council have completely eradicated the use of bailiffs when recovering unpaid council tax and instead step in and offer support when people start to fall behind. The Money Advice Trust found that only around half (48%) of all English and Welsh councils have a formal policy in place to recognise and assist residents in vulnerable circumstances.
These policies include things such as giving more time to repay, referrals to wider support services or pausing chasing the debt. However, all councils say they refer those in debt to charities for help such as the Citizens Advice Bureau and debt charity StepChange.
