Charities call for council cuts through use of bailiffs

Anti-poverty campaigners want councils committing to collection alternatives.

Debt-money-chart-houses

Anti-poverty charities want council cuts – but in the use of debt collection bailiffs, or ‘enforcement agents’.

There were more than 1.4 million referrals to bailiffs for the collection of council tax alone last year, according to figures from the Money Advice Trust (MAT) charity, which has been pressing councils to adopt protocols aimed at protecting vulnerable people.

The MAT report is based on FoI responses from 367 local authorities.

Stats show council use of bailiffs – particularly to collect council tax – is continuing to increase in about half of all local authority areas in England and Wales.

Across the board, the use of bailiffs to collect debts owed to local authorities in England and Wales has risen by 7% in two years.

Collection of council tax remains a particularly sensitive area: 30% of callers to the debt advice service run by MAT last year had council tax arrears – up from 15% in 2008.

Around 83% of callers who had experienced action by bailiffs reported a negative impact on their wellbeing.

“Bailiff action is harmful to people in debt – and the fact that local authorities are passing 2.6m debts a year to bailiffs should concern us all,” said MAT chief executive Joanna Elson OBE.

“Reforming the law around bailiff action itself is vital if we are to protect people from harm – and we are renewing our call for the government to introduce independent bailiff regulation and a single complaints mechanism.

“Of equal importance, however, is reducing the number of debts that are being passed to bailiffs in the first place.

“While we have seen a modest improvement in debt collection practices – and more councils reducing their use of bailiffs to collect council tax arrears – the pace of change is too slow,” she said.

The trust’s report – the latest in its Stop the Knock campaign – shows the proportion of local authorities that had reduced their bailiff use during the last two years stood at 51%, up from 38% two years ago.

To the LGA, that’s a “positive impact” from from the work it had been doing with Citizens Advice on a good-practice protocol for council tax arrears.

64 councils have signed up to the Citizens Advice/LGA council tax protocol – up from 50 two years ago.

A further 23 councils are considering signing up the protocol, which, for example, obliges local authorities to give careful consideration before passing debts to enforcement agencies where potentially vulnerable household are involved.

“Councils have a duty to their residents to collect taxes, which play a vital role in funding important services that people rely on,” said Richard Watts, chair of the LGA resources board.

“However, we realise that times are tough and councils do their best to protect those affected the most, whether through introducing hardships funds or taking a sympathetic and constructive approach to the way we collect unpaid tax,” he said.

MAT, however, says the pace of improvement nationwide is too slow and needs to be picked up by policy change at a local and national level.

The charity has written to council leaders and MHCLG to recommend:

  • All councils adopt the Money Advice Trust’s ‘six steps’ to improve, as already used by several councils and endorsed by the Welsh government
  • Government review and amend council tax regulations, place existing Good Practice Guidance on a statutory footing, and introduce and fully fund a requirement for councils to provide 100% Council Tax Support schemes
  • Government review the enforcement of Parking Penalty Charge Notices and bring this into line with CCJs – allowing the court to suspend warrants and people to apply to pay through affordable instalments

In addition to measures to reduce the use of bailiffs in the first place, MAT has renewed its call – made as part of the Taking Control group of debt advice charities – for the government to introduce independent bailiff regulation and an accompanying complaints mechanism.

Calls for independent regulation were recently backed by the Justice Select Committee, with the Ministry of Justice currently reviewing the case for independent bailiff regulation.

MHCLG is conducting a review of council tax collection.

MAT suggests steps councils can take to improve collection practices, including:

  • Make a clear public commitment to reduce bailiff use over time – for all debt types
  • Review signposting to free debt advice, including phone/online channels, to ensure all opportunities are maximised
  • Adopt the Standard Financial statement to objectively assess affordability
  • Put in place a formal policy covering residents in vulnerable circumstances
  • Exempt Council Tax Support recipients from bailiff action (in England)
  • Review current practice against the Money and Pensions Service ‘Supportive Council Tax Recovery’ toolkit
  • Sign up to the Citizens Advice/LGA Council Tax Protocol (in England)
  • Review current practice against the Money and Pensions Service ‘Supportive Council Tax Recovery’ toolkit

Housing Benefit debts

Housing Benefit overpayments are recoverable through a variety of methods, such as deductions from future payments of Housing Benefit, deductions from other benefits, via an adjustment to the tenant’s rent account, or by way of a direct-earnings attachment.

Where none of these recovery methods are practical, it is possible for a council seek a County Court order allowing enforcement action.

This can include applying for a warrant of control to authorise private bailiffs to act.

If the debt is more than £600, the debt may be transferred to the High Court for enforcement by High Court Enforcement Officers, although this rarely happens in practice.

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