Councils' use of bailiffs rises by 16% in two years, claims report

Councils used bailiffs to recover unpaid debits more than 2.1 million times in the past year, according to new research by the Money Advice Trust, the charity that runs National Debtline.

The charity’s research, based on Freedom of Information requests to local authorities, found that local authorities in England and Wales made a total of 2.14 million bailiff referrals for 2014/15, compared with 1.84 million uncovered by the same organisation’s research in 2013.

Council tax debts were passed to enforcement agents on 1.27 million occasions during 2014/15. Parking-related debts accounted for 715,000 referrals and Housing Benefit overpayments 40,000.  In addition, bailiffs were instructed to collect unpaid business rates 85,000 times and commercial rents on 2,700 occasions – as well as 32,000 sundry/other debts owed by individuals and businesses.

The research also found wide variations in the use of bailiffs between councils, with the most frequent user, the London Borough of Barking and Dagenham, making bailiff referrals in respect of 43.47% of the properties in the borough. Eight of the top 10 heaviest user councils were in London. Three councils did not use Bailiffs at all in 2014/15 – Wyre Borough Council, The Isles of Scilly Council and Charnwood Borough Council and many more had a usage rate of below 1% of properties.

The growth in bailiff use was not uniform across the country. In the two years to 2014/15, 159 councils increased their reliance on bailiffs but 132 authorities reduced their use in the same period.

The Money Advice Trust said that the main area of growth in the use of enforcement agencies was in respect of Council Tax arrears, in part because of the reduction on council tax discounts for the lower paid in recent years.

It said that Council Tax arrears was one of the fastest growing debt types being reported to the National Debtline – with 24 percent of callers in arrears in 2014 compared with 14 percent in 2007.  

The Money Advice Trust has written to all council leaders and local government minister Marcus Jones MP to highlight the growth in Council Tax debt and calling for a “better approach” to preventing and dealing with arrears.

Joanna Elson OBE, chief executive of the Money Advice Trust, the charity that runs National Debtline, said:

“Two years ago our original research on local authority bailiff use led to widespread calls for councils to improve their debt collection practices.  We had hoped the situation would have improved since then.  Instead, more than half of councils are using bailiffs even more than before to collect unpaid debts.

 “Something is seriously wrong here.  On the front line of debt advice we know that sending the bailiffs in can deepen debt problems, rather than solve them – and it can also have a severe impact on the wellbeing of people who are often already in a vulnerable situation.

 “Bailiff action is not only harmful to those in arrears – it is also a poor deal for the council taxpayer.  Our research shows that those local authorities that use bailiffs the most are actually less successful, on average, at collecting council tax arrears.  This is a lose-lose situation.

 “Local authorities are facing significant funding pressures – and they of course have a duty to collect what they are owed.  In the case of council tax, this is particularly crucial in ensuring proper funding for the local services we all rely on.  Too many councils, however, are far too quick to escalate to bailiff action when better preventive work, earlier detection and support for people who fall behind are far better options for all concerned.”

The Local Government Association defended the use of bailiffs as a last resort. Cllr Claire Kober, Chair of the Local Government Association's Resources Board, said:

"Reduced government funding for council tax support has left councils needing to find £1 billion by 2016 to protect discounts for those on low incomes. Many are facing an unpalatable choice between charging the working-age poor or low income families, who may have never paid council tax before, or finding additional savings to spending on local services to meet the shortfall.

"No council wants to ask those on the lowest incomes to pay more. But also faced with a 40 per cent cut to core government funding to run local services over the past five years, many have had little choice but to reduce council tax discounts.

"Councils have a duty to their residents to collect taxes so important services like caring for the elderly, collecting bins and fixing roads are not affected. But we realise that times are tough and will always seek to take a sympathetic and constructive approach.

"Bailiffs are only ever used as a last resort by councils. Before the situation reaches a stage where bailiffs are involved several letters will have been written, people will have been encouraged to apply for financial support, and efforts will be made to arrange new payment plans or to attach the debt to a salary.

"Anyone having trouble paying their council bills should get in touch with their local authority for financial help and advice."

To compile figures for bailiff use for 2014/15, the Money Advice Trust made Freedom of Information (FOI) Act requests to all 375 local authorities in England and Wales.  356 local authorities responded to the FOI request (95 percent of the total), while 19 local authorities did not comply with the FOI request in the research period.  In all cases, authorities were given longer than the statutory timeframe of 20 working days laid down in the Freedom of Information Act, and were issued with reminders.

Further information and individual council statistics can be found at the Money Advice Service’s compaign website at http://www.stoptheknock.org/.