Vulnerable people who fall behind with Council Tax payments will have greater protection from aggressive debt enforcement under new plans to improve the way councils collect arrears.
Following concerns from charities, debt advice bodies and local councils, ministers are moving forward with work to create a fairer, more efficient and compassionate debt recovery system.
Local Government Minister Rishi Sunak MP said:
Council Tax collection is essential to running public services, like caring for those most at risk, collecting bins and keeping our transport networks running.
The experiences of some innovative councils show that Council Tax collection rates can be improved without resorting to the unfair treatment of vulnerable people.
That’s why I’m pushing forward work to make the Council Tax collection system fairer and more efficient – so people are treated with compassion while services get the funds they need.
The Ministry of Housing, Communities and Local Government (MHCLG) will engage with charities, debt advice organisations and local authorities on changes to improve the current Council Tax collection system before considering further reforms later this year.
Reforms to the system could include:
Every year, councils issue nearly 24 million Council Tax bills to help fund key local services, from adult social care and children’s services, to refuse collections and leisure facilities. Uncollected tax means less money for services and higher bills for residents who do pay on time.
The government wants to bring in a more effective Council Tax collection system which treats people more fairly, while ensuring the money required to fund public services is collected. It recognises consideration of personal circumstances can help a person’s financial recovery.
MHCLG action forms part of cross-government efforts to improve the treatment of vulnerable debtors. This includes plans for HM Treasury to implement a ‘breathing space’ and statutory payment plan for people in debt and a Ministry of Justice review of bailiff regulations.
Caroline Siarkiewicz, director and debt advice expert at the Money and Pensions Service, said:
One third of people seeking debt advice have Council Tax arrears, so it’s really important that people receive the right guidance and support to manage their finances.
We are delighted that the Ministry of Housing, Communities and Local Government has committed to reviewing how local authorities recover unpaid Council Tax.
Through the development of our Supportive Council Tax Recovery resource, we know that councils that take a progressive approach to debt recovery can relieve stress and anxiety for residents, as well as have a beneficial impact on their collections rates.
We look forward to working with the department to help them create a more progressive and efficient Council Tax debt collection system.
St Albans district council is forging stronger connections with the debt advice sector to create a more consistent approach to determining residents’ ability to pay.
Staff proactively refer vulnerable residents to debt advice services. They hold off from applying to the courts for Liability Orders – which give councils powers to collect debt – unless payments run beyond 12 months or multiple payment arrangements are broken. The council also requires enforcement agents who collect debts to sign up to the council’s new affordability approach.
The council has been able to maintain high collection rates (98.9% in 2017 to 2018, compared to a 97.1% average across England) while treating residents fairly, proportionately and consistently.
North Warwickshire borough council is adopting a holistic approach to supporting vulnerable households. It does this through its Financial Inclusion Partnership, which is committed to helping residents access the right information and services according to their needs.
By putting assessments of what people in financial difficulty can afford at the heart of their processes, they have been able to better support residents in debt towards financial recovery while continuing to reduce historic arrears.
They are also building innovate partnerships with advice agencies and charities to engage hard-to-reach people, for example by providing debt advice through a food parcel scheme.
Their new approach contributes to their 98.6% collection rate in 2017 to 2018 and has also led to less reliance on enforcement agents, with 60% fewer cases referred to bailiffs in 2017 to 2018 compared to the same period in the previous year.
In 2013, the department issued guidance to councils recommending good enforcement practices. It said councils should be willing to negotiate payments at any point in the enforcement process, take account of individuals’ circumstances, and agree affordable and sustainable payment plans to ensure debts are paid off in a reasonable time.
The provides information relating to:
The beer waste and duty guidance was the subject of a statutory public consultation, which can be found here.
Today the PCA has published guidance which requires pub-owning businesses to provide their tied pub tenants with upfront accurate information during rent reviews on the duty paid on the alcohol supplied under their tied tenancies and the saleable volumes of keg and draught cask beers they offer. The guidance was the subject of a statutory public consultation in November last year and comes into effect from the 01 July 2019.
The Pubs Code Adjudicator, Paul Newby, said: “The publication of this guidance is another step in the process of ensuring that tied pub tenants always get the most accurate and consistent information from their pub-owning businesses about the terms of their agreements. This information is important to enable tenants to draw up realistic business plans and to help them to realise achievable levels of turnover and profit margins.”
Fiona Dickie (Deputy Pubs Code Adjudicator) added: “It is a further development in our mission to ensure fair and lawful dealing between pub-owning businesses and their tied tenants through greater transparency and better, clearer information being made available.”
The guidance also sets out the PCA’s expectation that pub-owning businesses will ensure that all of their tied tenants have access to training on cellar management and dispensing best practice, as well as to ongoing cellar management support, so that they can realise the levels of business on which their rent is based.
Notes:
This statutory guidance will be taken into account by the PCA when carrying out the PCA’s statutory duties.
The PCA has amended the section on duty paid in the draft guidance published in November 2018 in response to the consultation process to reflect the wording of HMRC Excise Notice 226 which requires disclosure of ‘the volume on which duty has been paid’.
The PCA has also addressed concerns about the potential ‘de-listing’ of small and / or seasonal brewers who may not be able to provide pub-owning businesses with accurate information on the volumes on which duty has been paid in the guidance. These recognise the reliance of pub-owning businesses on some third-party information when complying with the guidance, re-iterates that the Pubs Code refers to information that is ‘reasonably available’ in this context and references the PCA’s own statutory guidance on enforcement which commits the PCA to a proportionate approach to questions of compliance.
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The guidance can be read here.
The statutory public consultation and responses on beer waste and duty can be read here.
If you have any queries about the guidance or responses, please forward them to:
Email: office@pubscodeadjudicator.gov.uk
Address: The Pubs Code Adjudicator Lower Ground Victoria Square House Victoria Square Birmingham B2 4AJ
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