Agenda item

The Chair welcomed Joe Lane, Citizens Advice, to the meeting and asked Rose Doran to give a short introduction.

Rose said that, as part of its Reshaping Financial Support work, the LGA had been in discussion with Citizens Advice about reform of council tax recovery and that they shared many of the same concerns. Citizens Advice had just published a report into the issue and Joe would explain some of its findings.

Joe said that there was a real opportunity now to ask the Government to change the regulations to make council tax recovery both more efficient and more fair. He said that Citizens Advice were tyring to get a whole range of voices behind the campaign and he was hoping that the LGA would be one of them. He recognised that local authorities might come at this from a slightly different perspective given the pressures on their budgets but he argued that there was a good business case for reform.

Joe said that nationally, 2.2 million households were currently in council tax arrears and that council tax was the number one debt issue for Citizens Advice last year. He added that, of those in arrears, 90% had at least one other debt.

Joe said that the current regulatory system wasn’t working for residents or for councils. To illustrate this he said that for every £1 referred to bailiffs, councils received 27p in return but they had to pay 53p. Joe argued that the regulations rapidly pushed people further into debt and limited the ability of councils to take a more flexible approach.

Joe then went on to talk about the Citizens Advice council tax protocol and said that although it had helped with certain aspects, evaluations showed that such voluntary measures had limits within the current regulatory framework. He said that they were therefore asking for the LGA’s support in campaigning for reform in 4 areas:

1.    Stop residents being asked to pay their entire annual bill if they miss one payment.

2.    Give councils the power to initiate deductions from benefits without getting a liability order.

3.    Set out more steps councils must take before using the court process.

4.    Remove the threat of imprisonment for council tax arrears.

Following Joe’s presentation, members raised the following questions and comments:

·         Members were in agreement that the regulations needed reform. However, whilst there was agreement over the first three points, removing the threat of imprisonment was not generally considered to be a good idea, as it would effectively turn non-payment into a civil offence. Members asked how many people were actually jailed for non-payment. It was stated that the figure was around 100 nationally.

·         The question of a possible council tax exemption for care leavers and other special groups was raised. There were mixed views about whether this was a good idea. Councils which already operated this offered to share best practice.

·         How could members put pressure on their councils to support this work, for example through a model motion? Rose said that the LGA was looking at what councils would actually require in terms of support and resources to introduce the proposed changes.

·         Many councils were not now able to offer council tax relief which had a detrimental impact on the level of debt. Was there any empirical evidence of worse council tax debt problems in areas where Universal Credit had been rolled out and where there was no longer any council tax relief scheme? If so, could the LGA campaign on this?

·         It was suggested that the scope of the work needed to be broadened out to include best practice in councils, which was considered to be very variable. Good practice should be shared amongst councils.

·         The issue of abuse of the single-person discount was raised. It was suggested that there were a significant number of cases where this was happening.

·         Members were in agreement that the whole system of council tax was outdated and needed fundamental reform, rather than tinkering around the edges with changes to banding.

The Chair thanked Joe for his presentation and summed up the debate as follows:

·         The Board supported the first three of Citizens Advice asks but not the fourth.

·         There was support for sharing best practice around both council tax relief and data mining to clamp down on abuse of the single-person discount.

·         The Board agreed that the LGA needed to take a fundamental look at how councils were financed as the council tax system was not fit for purpose.

Decision

Resources Board members noted the presentation and agreed to support the first three of Citizens Advice’s asks but not the fourth.