Money Advice Trust repeats call for urgent reform of council tax support and collection rules as council tax arrears in England increase to a new high of £5.5bn

Recommendations include ring-fencing funding for local council tax support and reforming collection rules that can leave people liable for a whole years’ bill after just one or two missed payments

The Money Advice Trust has repeated a call it made a year ago for the urgent reform of England’s council tax support and collection rules after new government figures show that arrears have increased to a new high of £5.5 billion.

Responding to the latest council tax collections statistics covering 2022/2023, the Trust highlights that the total amount of council tax still outstanding to March 2023 was up by £510 million (10 per cent) compared to the year to March 2022.

In addition, the Trust highlights that in the past five years, the increase in arrears has far outstripped the general increases in council tax bills – while the average Band D council tax bill has risen by 18 per cent in the last five years (£1,671 to £1,966), this has been significantly outpaced by the level of council tax arrears which have risen by 69 per cent over the same period (from £3.2 billion to £5.5 billion).

As a result, the Trust urges the government to improve current council tax collection rules by –

• improving support through increased and ringfenced funding for local council tax support schemes to prevent arrears from occurring in the first place; and
• reforming existing collection rules (the Council Tax (Administration and Enforcement) Regulations 1992) by –
  • stopping people from becoming liable for their full annual bill if they fall behind on instalments; and
  • introducing a pre-action protocol so councils have to offer genuinely affordable repayment plans before progressing to other collections methods.

Chief executive of the Money Advice Trust Joanna Elson said today –

'Current council tax collection rules are not working for struggling households or for local authorities reliant on council tax income to run their vital services.

Today’s figures, which reflect an ongoing trend of increasing council tax arrears, confirm why reform is urgently needed to help both councils and struggling households.

These outdated rules, that can leave people liable for a whole years’ bill after just one or two missed payments, are not an affordable or efficient way to collect council tax debts and are completely out of step with the challenges many households are facing.

Reform is needed to ensure people having difficulty paying their council tax are not confronted with unfair and unsustainable collection practices that risk pushing them into further difficulty.'

For more information, see £5.5bn owed in council tax as charity calls for urgent reform of outdated collection rules from the Money Advice Trust website.

NB – the Scottish Government has also published Council Tax Collection Statistics: 2022-23 today which show that council tax arrears increased by £108 million in 2022/2023 to reach a total of £1.34 billion outstanding as at March 2023.