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Council Tax debt is the biggest debt issue seen by the CAB network

by Myles Fitt, CAS lead spokesperson on Financial Health.

This article was published in the Herald newspaper on 4 March 2020.

Council tax helps local authorities deliver services to local communities that we all benefit from and by law most adults have to pay towards it.

Over recent years however, the Citizens Advice Bureaux network in Scotland is seeing more and more people struggling to pay council tax due to general pressures on household budgets. Last year, we helped over 2,000 people with council tax debts totalling nearly £7million which works out at around £3,000 per person - three times the average council tax bill!

Council tax debt is now the single biggest debt issue that people bring to the Citizens Advice service.
Some of the reasons can be found in the wider economy. Stagnating wages, higher cost of living, welfare reform cuts, insecure employment, and irregular income are squeezing people’s budgets and leaving them with hard choices to make about which bills and costs to spend their limited incomes on. Rent? Energy bills? Food? Clothes? Council Tax?

It would appear increasing numbers of people are struggling to pay the latter - council tax. Yet what many people don’t realise is that local authorities rigorously follow set procedures for collecting council tax and their collection rates are monitored by the Scottish Government. Falling behind on council tax can lead to the removal of the right to pay in instalments, being charged the whole council tax bill for the year and ultimately enforcement action to recover the debt by Sheriff Officers. It is striking that around 88% of debt enforcement actions by sheriff officers are to recover summary warrants for council tax.

This is not a good situation to be in – individuals do not want to be in debt nor do local authorities want to be debt collectors – and while the Citizens Advice network in Scotland gives advice and support to those in council tax debt, we also want to stop this debt developing in the first place, that’s why we launched a campaign this week called Council Tax – Check to Save can go some way to making a difference.

This campaign raises awareness of the range of savings on council tax that people are entitled to because not everyone has to pay full council tax. Through exemptions, reductions and discounts – offered by local authorities but paid for by central government – these savings could make all the difference to those struggling to pay council tax or facing council tax debt.

So, we have developed an online tool which allows people to check their eligibility for these savings. It takes just five minutes to answer a set of questions at checkmycounciltax.scot which will help identify any savings that apply and gives directions on next steps for making a claim. 

From the evidence of people coming into our Citizens Advice network for council tax debt advice, it is clear there is a lack of awareness of the savings that can be had.

This also chimes with stats from the Scottish Government on the numbers claiming Council Tax Reduction, the scheme for those on benefits and low incomes to get some relief from council tax. Since it was launched in 2013 to replace Council Tax Benefit, around 85,000 fewer people are claiming and yesterday the latest quarterly stats were issued which showed a further fall.

It is unlikely this is because things have improved economically to such an extent that so many people no longer need to claim. Rather it is more likely to be down to a lack of awareness coupled with the fact that Council Tax Reduction requires people to make a claim, whereas claiming the previous Council Tax Benefit was joined up with other benefits.

That’s why we want to see the Scottish Government review falling Council Tax Reduction rates to deliver a better understanding of why there has been such a sharp fall.

It is the perfect moment to make a call for more to be done to raise awareness about savings on council tax at a time of increases in council tax bills. For some people, it is good news that they may not have to pay the full amount, or at all, and it may stop them falling behind and into council tax debt. For local authorities, people getting the exemptions, discount and reductions they are due reduces the amount of unnecessary debt recovery required for bills that are unaffordable. For Scottish Government, it is a good news story that they are providing funding to help people at a time of increased pressure on household budgets.

Citizens Advice Scotland would like to work with local authorities and Scottish Government to ensure the public has the best possible awareness of their entitlements to savings on council tax to reduce the numbers of people falling behind in payments and getting into debt

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