Credit, Collections & Insolvency News
The Welsh Government has launched a plan to end prison sentences for non-payment of council tax. Regulations will be brought forward in early 2019 to prevent any more people being jailed for council tax debt in Wales, pending the outcome of a 12-week consultation.
Unlike other forms of civil debt, courts have the power to send people to prison for up to three months for non-payment of council tax. A recent judicial review, brought by a woman from Bridgend, highlighted the number of people being sent to prison for council tax debt, in some cases unlawfully.
Finance Secretary Mark Drakeford said “My view is that getting into debt is not a crime. The sanction of imprisonment is an outdated and disproportionate response to a civil debt issue. There is a significant additional cost to the public purse of imprisoning individuals and such action does nothing to address the reasons for the debt owed to the local authority or to reduce the debt. In many cases, it makes the situation worse. We must also consider the longer term impact on the well-being and future prospects of people who are committed to prison and the effect on their families. There is also a knock-on impact on other public services, as more support is often needed by someone who is committed to prison and their family.”
Alistair Chisholm, head of advice sector policy and partnerships at PayPlan, wrote an industry report ‘I can’t believe we still do that’ in November 2017. The report, a joint project between PayPlan and the Institute of Money Advisers revealed:
Commenting on the announcement by the Welsh Government Alistair Chisholm said “We are delighted by this announcement – it’s great to see that the Welsh Government has decided to change this outdated law. Sending people to prison because they are behind with a bill can be devastating – for them and their families. Prison should be for serious crimes, not local debt.”
“I have enormous respect for the women who were sent to prison for council tax debt in Wales who have spoken out about this issue in court and in the media. They have made a huge difference. Our review of councils across England and Wales last year found that the Vale of Glamorgan Council committed 14 people to prison in 2016/17 as a result of council tax arrears, the second highest for a council in the UK. I hope it will be some comfort for these individuals that in the future other people won’t have to suffer being locked up for local debts.”
“Those struggling with debt should not feel they are unfairly lumped together with criminals. We hope this announcement will see Welsh councils work more closely with advice agencies and those members of their community struggling financially so that council tax debt collection is proportionate and fair. It’s now time for government authorities in England to stand up and take notice of these changes, and get up to speed with counterparts in Scotland and Northern Ireland where this outdated practice is already unlawful.”
Robert Wilson, Chief Executive of the Institute of Money Advisers, said “As well as action by government and local councils, we need improved training for magistrates and court staff. Dealing with the growing number of people who have serious money problems requires expertise. Debt is complicated, and officials need an informed, professional understanding of the realities of living with financial difficulty. We would like to see the courts and the Ministry of Justice working more closely with money advisers.”