Unpaid council tax soars to £6bn

We owe more in unpaid council tax than ever before – arrears have risen the most since the cost-of-living crisis began.

A new report from think-tank Centre for Social Justice (CSJ) says council tax arrears have ballooned to a high of £6bn, soaring from around £4.4bn in 2020/21. A decade ago, we owed about £2.5bn.

Financial pressure

The report highlights a widening divide between those who can easily pay their bills and the poorest 10%. As many as 1.3 million households are struggling to pay their bills, many of which are on the breadline.

Families who fall behind on paying their council tax are more likely to be on a low income and struggle to pay for housing, food and energy bills. They’re also more likely to face enforcement by councils.

On average, the amount of council tax owed by those seeking debt advice has more than doubled in the last 10 years – from £756 to £1,726. It’s something we’ve seen too, as over a third (35%) of the people we help have fallen behind on their council tax bills.

Councils are struggling because families are

But families aren’t the only ones struggling – councils are too. There’s a £6bn gap from unpaid council tax, forcing councils to cut back on essential public services like bin collections, running parks and libraries, maintaining roads and providing social care.

It’s little wonder councils want the money they’re owed, with many becoming more aggressive and sending round bailiffs to retrieve the debt.

But this isn’t necessarily the best course of action. Government figures show that when councils got bailiffs involved, council tax repayments actually fell by six percentage points between 2018 and 2022.

Matthew Greenwood, head of debt at CSJ, says the £6bn figure is proof that the process of debt collection “is failing local authorities and taxpayers alike.”

He adds: “The often harsh repayment methods used by many local authorities are making repayment rates worse, not better”.

Help people pay their council tax

The CSJ calls for a clear difference to be made between households who genuinely can’t afford to pay (the majority of non-payers) and those who refuse to.

They want to see:

• vulnerable people treated sensitively
• anyone struggling being helped with tailored repayment terms, such as adding part of a missed payment to other months
• eligible people being told about council tax reduction schemes, including an automatic trigger when applying for universal credit
• prison no longer being a threat for failing to pay council tax (which is only a risk in England)
• existing rules that demand full annual payment after missing just one month relaxed
• paying over 12 months, not 10, being made the default
• enforcement avoided for those experiencing financial hardship
• statutory footing for the enforcement conduct board, which oversees bailiffs, so vulnerable households are protected if things go wrong

We’re here for you

Council tax is a priority debt, so there’s serious consequences if you don’t pay. Find out how to get back on top, using our guide to help you.

If you’ve fallen behind on your council tax payments, you might be struggling to pay other bills too. It might be time to consider free debt advice. 

We can ask for breathing space to give you time to find a longer-term resolution as well as help you with budgeting, applying for benefits or debt solutions (some are free and there’s a fee for others).