Cases of council tax arrears up 27pc

[dutchman]

Rising rents, higher unemployment and the financial squeeze have led to a sharp increase in the number of people falling into arrears on their council tax, despite most English councils freezing this housing charge for the past two years.

Debt charities report that they have seen a 27pc increase in the number of people contacting it for help with council tax arrears. In 2010 the Consumer Credit Counselling Service (CCCS) had just over 13,000 cases, which rose to almost 17,000 cases the following year. Over the period the size of money owed to the council rose from £675 to £717.

CCCS said much of this rise had been fuelled by the worsening financial position of renters. For the first time the charity said it had more queries from those in rented accommodation that from those that own their own home. While many homeowners have been cushioned by low interest rates, which have helped keep mortgage repayments manageable, those who rent have faced steep increases in their outgoings. With fewer first-time buyers able to get on the housing ladder – thanks to tighter lending restrictions – demand for rented property has helped to push up the monthly rental costs significantly.

Delroy Corinaldi, a spokesman for CCCS said he expected this problem to get significantly worse in future. "The financial squeeze is causing more and more householders to fall behind with council tax bills, and this is a problem we expect to get worse over the coming year.

"Council tax is a priority debt and non-payment of it can have very serious consequences. Anyone who is struggling to keep up with these bills should contact their council to discuss the problem, and check that they are receiving any discounts or rebates to which they may be entitled. If you are struggling to cope you should also seek free advice from a debt charity like CCCS as early as possible."

Failing to pay your council tax can lead to a legal action to recover costs, and in the worst case scenario bailiffs being called, and the debtor being declared bankrupt.

In many cases courts issuing "liability order" to recover missed payments can order this money to be deducted directly from salary payment or benefits.

Those who are in debt, and struggling to pay council tax bills, should contact their local council, and if necessary, one of the free debt advice charities (such as CCCS, or Citizens' Advice).

Most councils will arrange repayment plans for those in financial difficulties, where people can apply to lower their monthly payment and repay their debts over a longer period of time.

[dutchman]

And many people on low incomes are oblivous that from next April they will no longer qualify for Council Tax Relief as at present* so even if the nominal charge remains the same they will have much more difficulty in paying it.

*It is estimated that the average shortfall for those of working age will be 20% but the exact amount will vary from one council tax area to another. Some residents on low incomes may receive no tax relief at all while others receive the same amount as before.

It would be interesting to see the council tax arrears figures for Coventry and what arrangements the council have made to avoid even more people falling into arrears when the new system comes into effect next April?