Council tax arrears in England hits a document excessive of almost £6bn

  • Outstanding council tax arrears have risen by 67 per cent in the past five years
  • Money Advice Trust is calling for a reform to debt collection practices
  • The average council tax bill reached £106 per month during the last year

Council tax arrears in England have reached a record high of £5.97billion, with a further £488million – or 9 per cent – now owed compared to last year, data suggests. 

Outstanding arrears have increased 67 per cent since 2019, growing from just £3.58billion five years ago, according to data from the Department for Levelling Up, Housing and Communities.

For England and Wales combined, the figure has surpassed the £6billion mark, reaching £6.2billion as of 31 March.

National Debtline said a third of its callers are in council tax arrears, and that it is the most common priority debt its advisers heard about. 

On the rise: The average council tax bill has increased to £106 per month this year

On the rise: The average council tax bill has increased to £106 per month this year

The charity said that on average its callers owe £1,762 in arrears, which has increased by 49 per cent from just £1,181 in 2019.

Council tax arrears are known as a ‘priority debt’, meaning that they need to be paid ahead of others such as credit card debt.

With the average council tax bill having risen to £106 this year, an increasing number are likely falling behind on their payments. 

The charity warned that when combined with the cost of living, more people are at risk of facing financial difficulty.

Steve Vaid, chief executive of the Money Advice Trust, said: ‘Council tax debt is on a worrying upward trend and the sheer scale of arrears now underlines the need for urgent action.

‘But this is nothing new. Council tax continues to be one of the most common debts among our National Debtline clients, and recent cost of living pressures have left many more people struggling to keep up with their payments.’

Ahead of the election in July, Money Advice Trust, which runs National Debtline, has called for council tax collection reform that improves collection practices. 

It says this will reduce arrears and ensure that households with low incomes get the support that they need.

The charity said people should not be liable for their whole annual bill if they fall behind on payments, and councils should offer affordable repayment plans before they resort to other collection methods.

Currently, those in arrears are liable to pay their entire annual tax bill if they miss a payment. 

Those in debt can be sent to prison for up to 90 days if a court decides you don’t have a good reason to not pay your tax bill.

Money Advice Trust has also called for independent regulation of the bailiff industry to ensure fair treatment for those in debt.

‘Councils have a vital role in helping residents with unmanageable bills and to ensure council tax, crucial to funding local services, is collected in a way that is fair and affordable,’ Vaid said.

‘Reforming collection practices should be a priority for the next government, including putting an end to people becoming liable for their full annual council tax bill after falling behind.

‘I would urge anyone worried about their council tax, or any other bills, to seek free, independent advice from National Debtline. Our advisers are here to help and can talk you through your options.’

National Debtline provides free expert advice and can be contacted on 0808 808 4000.