Over seven million people (14%) are worried that they will not be able to afford their council tax bills over the next year, according to new research from the Money Advice Trust.

Findings from the charity’s ‘Council Tax After Covid’ report have highlighted that some vulnerable groups are most at risk of falling behind on their council tax, with people with disabilities or long-term health conditions three times more likely to be in arrears.

The findings come as latest Government figures show that council tax arrears in England have reached record levels, with over £4.4 billion owed. While the figure has grown significantly due to the impact of Covid-19, council tax arrears were already increasing at worrying levels even before the pandemic.

Between 2013, when the Government introduced a new localised system with lower funding for Council Tax Support, and 2020, council tax arrears in England grew by over £1.2bn, or 51%. In comparison, in Wales – where full funding was maintained – arrears grew by only 28%, or £24.2m. In the decade between 2009 and 2019, the proportion of callers to National Debtline with council tax arrears doubled, from 15% to 29%.

New national research conducted by YouGov for the Money Advice Trust found that a clear majority of adults in Britain (59%) would support the Government providing more funding for councils to help people on low incomes who are struggling with their council tax bills.

The Money Advice Trust is calling for urgent reform to current council tax collection rules and a permanent increase in funding for local Council Tax Support in England, so that councils can provide support for up to 100% of council tax bills for those unable to pay. Funding for this purpose was introduced as a temporary measure for Covid-19.

The charity says that without these changes, the current system of council tax collection and support is unsustainable for the struggling households and local authorities that are under increased financial pressure in the wake of the pandemic.

The charity’s recommendations include building on the actions the Government took during the pandemic, by continuing increased funding for councils to provide 100% Council Tax Support schemes to eligible households. Reforming outdated council tax collection rules, to prevent the rapid escalation of debt and ensure people in debt are treated fairly and local authorities exempting residents who receive Council Tax Support from bailiff action, in recognition of the fact they have already been identified as vulnerable using locally-set criteria.

Joanna Elson CBE, chief executive of the Money Advice Trust, the charity that runs National Debtline and Business Debtline, said “With 7 million worried about affording their council tax bills in the next year and council tax arrears reaching crisis point, urgent action is required to help people struggling to pay.”

“The current system of council tax collection and support isn’t working for anyone. Without the permanent funding needed to provide 100% council tax support for those who need it, local authorities are taking the costly route of attempting to collect partial amounts from people who simply cannot afford to pay.”

“This not only leaves councils with limited to no returns on the tax they need to fund vital local services, but risks a swift escalation of debt problems for households that are already struggling.”

“One of the first steps the Government took when Covid-19 struck was to temporarily fund councils to offer 100% Council Tax Support, to help deal with the crisis. But millions of households are now facing a crisis of their own, and permanent support is needed. Without fairer collection practices and increased funding for council tax support in the longer-term, the unsustainable arrears rates we see now are likely to continue to rise – putting more pressure on councils and households alike.”

“We hope the Government will build on its good work during the pandemic and bring forward the lasting reform needed to the council tax system in England. And we would urge anyone who is worried about paying their council tax to seek free, confidential debt advice from a charity-run service like National Debtline as soon as possible.”