Helping to solve the council tax debt epidemic

How Citizens Advice Wolverhampton are helping the council and local residents better manage council tax debt

When I trained as a Citizens Advice debt adviser around 10 years ago, council tax arrears were unusual. I spent more time talking to people about debts like credit cards, overdrafts and doorstep loans.

Advisers in my current debt team can’t imagine this. Today, almost every client we see with debts owes money on their council tax.

Nationally, Citizens Advice advised 93,000 people with council tax debts in 2017/18.

In Wolverhampton alone, we helped nearly 700 people with 1,139 council tax debts amounting to just over £1 million. 234 of these accounts were with bailiffs or collection agents before we became involved.

This is clearly a big problem for our clients. But we recognise it’s also a huge problem for councils , who desperately need this money to provide services.

So we worked with City of Wolverhampton Council to build our relationship, and prevent and manage debt, signing the Citizens Advice Council Tax Protocol last year.

Helping us advise more people

The protocol commits the council to work with us when we’re helping a client. It also recommends regular, open conversations about debt collection, and how we both manage our work and support residents who are struggling.

As a result, we’ve suggested changes to reminder letters to make them clearer and can now attend the magistrates’ court to offer advice to people turning up to council tax debt hearings. This is particularly beneficial, as very few of the people we meet at court have used our services before.

We’ve also been consulted on the council’s refreshed debt collection strategy.

Sally’s story

An example of one of the people we have been able to help is Sally. Sally had attended a council tax hearing at the magistrates’ court. She spoke to the council tax recovery team, who signposted her to our debt advisers at the court session. They felt she needed advice and help before she could enter into a sustainable repayment plan.

During our conversation with Sally we identified that she was not getting tax credits that she was entitled to — which would really help her repay her council tax arrears — and she was juggling several other debts too.

After this initial assessment, Sally came to our office for full advice. We managed to increase her income through a new tax credit claim and charitable grant from her water supplier and negotiate sustainable repayments to her council tax and non-priority debts, avoiding any further enforcement action on her council tax debt.

Advisers can deal with debts more quickly

We have regular meetings with the council’s revenue collection team, which has had real benefits for dealing with debts quickly. We responded to feedback from the council that they’d not always had enough detail to make informed decisions about accepting offers of repayment. We now make sure we give them a more detailed financial breakdown of our client’s finances, so they can make a decision in one go, saving everyone time and money.

Extra help for Universal Credit claimants

We’ve also been talking to the team about Universal Credit, which rolled out in full service in Wolverhampton last year.

Both sides were concerned about the rapid increase in unpaid council tax — largely a result of a significant drop in claims for Council Tax Reduction when people moved to Universal Credit.

We were also concerned the council could take court action during the Universal Credit waiting period — which would be a waste of their time when the claimant has no income, and distressing for the claimant. These shared conversations prompted us to create a local campaign to make sure all new Universal Credit claimants are aware they need to make a separate claim for Council Tax Reduction. The council agreed an 8 week delay in initiating recovery when someone begins a new Universal Credit claim.

Of course we still disagree — one of us would not be doing our job properly if we were always of one mind — but we have now built a relationship where disagreement can be managed.

I’ll be at the Local Government Association conference next week sharing more on how to help residents with council tax debts — and how Citizens Advice can save councils money.