The use of bailiffs to collect debts owed to local authorities in England and Wales has jumped by 14 percent in two years, according to new research by the Money Advice Trust.
More than 2.3 million debts were passed to bailiffs by local authorities in 2016/17 according to the research, based on Freedom of Information requests. Bailiffs, also known as enforcement agents, have the right to visit a property to remove and sell goods to repay certain debts, including council tax arrears, parking notices and other debts owed to councils.
Councils increased their use of bailiffs by 14 percent overall between 2014/15 and 2016/17, despite government guidance stating that bailiff action should only ever be used as a last resort. However, the Money Advice Trust says that an increasing number of councils are working hard to improve their debt collection practices – and that four in 10 (38 percent) actually reduced their reliance on bailiffs in that time.
The charity’s new report, Stop The Knock 2017 found that council tax debts were passed to bailiffs on 1.38 million occasions between April 2016 and March 2017. Parking notices were passed to bailiffs around 810,000 times, and there were around 50,000 referrals to bailiffs for Housing Benefit overpayments.
Bailiff use increased for all major types of debt between 2014/15 and 2016/17, with the number of council tax debts passed to bailiffs up 10 percent, parking referrals up 27 percent and referrals for Housing Benefit overpayments up 20 percent.
At the same time, nearly four in 10 local authorities in England and Wales (38 percent) reduced their reliance on bailiffs over the two years, and the Money Advice Trust’s survey of council debt collection found many examples of good practice.
The vast majority of local councils surveyed (97 percent) signpost residents in financial difficulty to free debt advice, and 50 councils have now signed up to the Local Government Association’s joint Council Tax Protocol with Citizens Advice. A further 38 councils are currently considering signing the Protocol, which aims to help councils to prevent residents from getting into arrears in the first place.
In addition, 23 councils in England have introduced a policy of exempting residents on the lowest incomes, who receive Council Tax Support, from bailiff action altogether – a step the Money Advice Trust and other charities have long called for.
Nevertheless, almost half of councils (44 percent) have no formal policy for dealing with residents in vulnerable circumstances when collecting debts – and while the vast majority signpost residents to free debt advice, 10 councils reported that they did not take even this basic step.
The Money Advice Trust is today publishing six steps (see below) it recommends all local authorities should take to improve the way they collect debts, and is writing to the Minister for Local Government, Marcus Jones MP, to ask for his support in encouraging councils to improve.
Joanna Elson OBE, chief executive of the Money Advice Trust, said “The growing use of bailiffs to collect debts by many local authorities is deeply troubling. Councils are under enormous financial pressure, and they of course need to recover what they are owed in order to fund vital services. However, many councils are far too quick to turn to bailiff action – which we know can seriously harm the wellbeing of residents who are often already in vulnerable situations. It can also push people even further into debt.
“Bailiff action should only ever be used as a last resort, and can be avoided by early intervention, making sure residents get the free debt advice they need, and agreeing repayment arrangements that are affordable and sustainable. The good news is that many councils are working hard to improve – and indeed, nearly four in 10 are actually using bailiffs less than they were two years ago. They should be congratulated for showing that this can be done.
“I hope that our new research, and the six steps we are laying out today, will help many more local authorities as they seek to improve the way they collect the debts they are owed.”
The Money Advice Trust has published the results of its research on a new online map at www.stoptheknock.org along with six steps for local authorities to take to improve their practices:
- Make a clear public commitment to reduce bailiff use over time
- Review signposting to free debt advice, including phone/online channels
- Adopt the Standard Financial Statement to objectively assess affordability
- Put in place a formal policy covering residents in vulnerable circumstances
- Exempt Council Tax Support recipients from bailiff action (in England)
- Sign up to the Citizens Advice/LGA Council Tax Protocol and examine the Money Advice Service’s toolkit for working with debt advice agencies
In addition to campaigning for change in local government, earlier this year the Money Advice Trust joined with Citizens Advice, StepChange Debt Charity and a group of other charities to launch Taking Control, a new campaign calling on the Ministry of Justice to reform the law surrounding bailiffs in England and Wales.
Responding to the Money Advice Trust’s report on councils using bailiffs, Cllr Claire Kober, Chair of the Local Government Association’s Resources Board, said “No council wants to ask people on the lowest incomes to pay more, but councils have a duty to their residents to collect taxes – these fund crucial services, such as caring for the elderly, protecting vulnerable children, keeping roads maintained and collecting bins. With councils facing a £5.8 billion funding shortfall by 2020, it’s essential that these funds are collected so these vital services can be protected.”
“As the report indicates, councils will take steps, where possible, to make sure that people in financial difficulty are supported, whether that’s through signposting to free debt advice, or through the joint Council Tax Protocol, which the LGA has developed alongside Citizens Advice to support those who are struggling. Before councils use bailiffs, which are only ever used as a last resort, people will have been encouraged to apply for monetary support and efforts will have been made to either attach the debt to a salary or arrange new payment plans.”
“Anyone who is having trouble paying their council tax or bills should contact their local authority as soon as possible, for financial help and advice, and to discuss the options available.”