Conservatives generally recognise the practical case for low taxation – that it allows for a productive and efficient economy and thus avoids impeding the steady growth in prosperity. Most of us would also be conscious of the moral case. A belief in individual liberty and private property must surely include a presumption that we are allowed to spend our own money and that the amount of the stuff that is expropriated by the state to spend for us be kept to a minimum. When it comes to Council Tax there is a further moral objection which is that it hits the poorest the hardest. So it is not sur[rising that some getting into difficulties over paying their Council Tax bills.
I have noted before that the law does not treat debts equally. There can be imprisonment for Council Tax debt, even though it is a civil matter, but not for an electricity bill or being behind with the rent. Notoriously people can be locked up for not paying the TV Licence – astonishingly this is a criminal offence. Generally the minimum threshold for bankruptcy to £5,000 – yet the more severe punishment of imprisonment can be applied for owing much less than this in Council Tax or the TV Licence fee. The state gives itself draconian powers to put itself in the front of the queue when it comes to collecting debt. Despite having these powers local authorities are inefficient at recovering what they are owed – often proving slow, inflexible and prone to error.
So I am pleased that the Ministry of Housing, Communities and Local Government is proposing to reform the system. It is proposed the changes will include:
- ensuring affordability assessments are central to Council Tax collection processes so individual circumstances are taken into account and people are given appropriate time to pay off arrears
- improving the links between councils and the debt advice sector
- developing and supporting fairer debt intervention methods
Rishi Sunak, the Local Government Minister says:
“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.”
Two of those “innovative councils” are run by the Conservatives.
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.” As a result:
“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 per cent in 2017 to 2018, compared to a 97.1 per cent 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.” It also seems to have worked well:
“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 per cent collection rate in 2017 to 2018 and has also led to less reliance on enforcement agents, with 60 per cent fewer cases referred to bailiffs in 2017 to 2018 compared to the same period in the previous year.”
As a matter of principle, there should be equality before the law. So debts for TV Licence and the Council Tax should not have any special legal priority over utility bills, credit card bills or any other debt. Those anomalies should be ended. But I suppose “guidance” is better than nothing. Of course, debts must be pursued – and those who are behind in their payments be required to catch up with them as swiftly as is feasible. Reducing delays in the court system would help, where this remedy is required. But justice tempered with mercy, as applied in St Albans and North Warwickshire, provides the right balance.