Council Tax Recovery

Purpose of report

For information and discussion

Summary

This presentation will provide members with an opportunity to hear about Citizens Advice research on council tax recovery in the context of LGA’s work on Reshaping Financial Support.

Recommendation That Resources Board members note the report and advise on appropriate next steps for Citizens Advice and LGA. Actions As directed by members

Contact officer:	Rose Doran

Position:	Senior Adviser

Phone no:	02076643073

Email:	rose.doran@local.gov.uk

Council Tax Recovery

Summary

Debt recovery and support for indebted households are key strands within the LGA’s work on Reshaping Financial Support (RFS).

Citizen’s Advice are one of a range of partners and stakeholder we are working with at both a national and local level.

The LGA worked with Citizens Advice to introduce a voluntary protocol for council tax recovery to support good debt collection practices.

In April 2019 the Ministry for Housing Communities and Local Government (MHCLG) announced a review into the way council tax debt is recovered. We have yet to see the results of the review. It has not considered the impact of Government regulation.

Citizen’s Advice have recently done further work and research to understand the problems faced by households who may be struggling to pay council tax or council tax debts, and what constraints councils face in developing fair and effective approaches to recovery and debt advice / support

This presentation will give Resources Board members an opportunity to hear from Citizens Advice about their research and to advise both Citizens Advice and LGA officers on appropriate next steps

Background

The LGA is delivering a programme of work on Reshaping Financial Support (RFS), to identify and share good practice and inform policy development across the full range of direct and indirect financial support and advice that councils provide to low income households.

Fair and effective debt recovery and support for households in problem debt are key strands within the RFS programme. The LGA is contributing to discussions with Government, councils and key stakeholders on several pertinent policy areas including:

Support for people moving on to, or adjusting to, Universal Credit and other aspects of welfare reform

The Cabinet Office Fairness Group and the cross-Government debt strategy

HMT Breathing Space scheme, which is bringing in legislation to give people in problem debt the right to legal protection from creditor action while they receive debt advice and enter an appropriate debt solution.

MHCLG review of approaches to Council Tax recovery

The LGA is keen to ensure that it is working with key partners and stakeholders, including Citizens Advice, at both a national and local level to develop effective integrated approaches to improving outcomes for low income households and people in financial difficulty.

Citizens Advice and Council Tax Recovery

Citizens Advice is pushing for changes to how council tax debt is collected because they have identified that council tax debt is a significant issue for their clients, and collection is the key problem. In their experience many people in council tax debt can't afford to pay and have other problems, but the debt collection process isn't designed with this in mind and can push people further into hardship.

Citizens Advice has worked closely with councils to design asks around how to make the system better and more efficient for councils themselves, speaking to representatives from 40 councils and with the Institute of Revenues Rating and Valuation (IRRV).

The Council Tax Protocol was agreed and introduced to try and make change without the need for a change to regulations, but Citizens Advice research shows there are limits to what can be achieved with a voluntary approach.

There's currently a Government review underway into the guidance around council tax collection but based on their research it is Citizens Advice’s view that for meaningful improvements to be enabled the regulations need to be changed. The system needs to be flexible, fair, and effective for councils. Citizens Advice has proposed changes to the regulations that include stopping people becoming liable to pay an annual bill when they miss a payment and giving councils the power to collect debt more fairly.

Next steps

LGA to integrate further work on debt recovery into its work on Reshaping Financial Support