A new report from Christians Against Poverty (CAP) is highlighting the powerlessness of those facing multiple debt collections from local councils and the state.
While the practices of private companies have become more customer-focused, a study shows the depths of suffering from people chased for debts like council tax and benefit overpayments. Now the charity wants to see the long-promised Breathing Space scheme give people relief from local and central government debt collection, as well as the private sector.
Matt Barlow Chief Executive of CAP said “While we’re happy to have seen improvement in some of the private sector’s debt collecting practices, it is totally unacceptable that some of the most aggressive debt collecting behaviour in our nation comes from the hands of both local and national governments. The reality is, people on the receiving end can feel completely overwhelmed and unable to cope and our findings show they are not given sufficient avenues of understanding or support. Many have no idea why they owe what they owe and that’s both confusing and frightening.”
“We’ve seen so much improvement in the private sector, the utilities companies too are making great strides in the way they treat people in debt. Local and national governments are put in place to serve the nation, and whilst they do a very good job in so many areas, their practices in debt collection fall a long way short.”
Main findings from the report Powerless People show:
- Almost half of all debt clients helped by CAP have a debt with the DWP, HMRC or their local authority.
- Debt clients were 41% more likely to have considered suicide than those with only private sector debts.
- 42% of respondents said they were ‘a lot more’ stressed about these debts than others.
- 69% had skipped meals, 77% had made them ill, 93% had suffered sleepless nights
- Further levels of stress were experienced by those with several debts deducted at source from their benefits, leaving them with little to live on.
The report shows that when one monthly council tax payment was missed, this would regularly result in a person becoming liable for the whole year’s payment up-front yet only half of local authorities have signed up to the council tax protocol.
Advisors at the charity described making contact with government creditors as ‘challenging’ and cited one local council only contactable online. Meanwhile, HMRC were criticised for long queue times on expensive helplines. Enforcement fees and administrative penalties (some up to 50% of the original sum) were noted as causing debts to unfairly escalate.