Councils owed millions in unpaid council tax bills

Millions in council tax is not being paid
Millions in council tax is not being paid
Picture: SWNS

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  • Councils owed more than £26m in unpaid council tax
  • Debt charities say people are struggling to pay due low incomes
  • But people are also not prioritising council tax bills
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NEW figures reveal councils across the area are owed £26m in unpaid tax.

And as the government dramatically reduces the amount of cash it gives local authorities, councillors say it is vital people pay up to avoid an increase in council tax or cuts in services.

We have understanding for those who are in genuine difficulties. But I can understand that residents feel it is totally unfair when there are those who choose not to pay to support services.

Councillor Mark Hook

But debt charities say it is not just down to people who think they can get away with not paying – it is that many people are struggling to cope financially.

Portsmouth City Council is owed £13.2m, Havant £4.09m, Fareham £2.469m and Gosport £6.356m.

That figure includes the Hampshire County Council – for Havant, Fareham and Gosport – police and fire precepts.

But much of the debt is historic – from as far back as 2001 – and cannot be collected.

Joanna Elson, chief executive of the Money Advice Trust, which unearthed the figures, said: ‘People fall into unmanageable debt for all manner of reasons – including losing a job or having their hours reduced, health problems or the breakdown of a relationship.

‘Since the recession, we’ve seen more and more people simply fall behind with everyday household bills.

‘There is often no single big cause, but lots of factors chipping away at their ability to keep on top of their finances.

‘For a long time, wages did not keep up with inflation which had a big impact and many people have also seen changes in their income as a result of welfare reform.’

Lynne Davies, chief executive officer of Portsmouth Citizens’ Advice Bureau, said zero-hour contracts were a major issue but people needed to understand that council tax is a priority bill – along with rent.

She said: ‘We try and help people budget. Housing costs must always be dealt with as a priority and people don’t understand that it’s not the people who shout loudest they ought to pay first – even if credit card companies are pestering constantly.

‘Employment is certainly on the increase and we have seen a fall in Portsmouth in the number of people claiming jobseeker’s allowance. But people are moving into fairly low-paid, low-security jobs on zero-hour contracts.

‘This is not a myth. While one week they might be doing 30 hours, the next week they’ll have none and the next week, five hours. It’s totally unpredictable and budgeting in these circumstances is extremely difficult.’

She added: ‘It’s a question of behaviour change. People lack the understanding that they can’t prioritise their Sky subscription and their wants, rather than their needs.’

Councillor Mark Hook, leader of Gosport Borough Council, said the council has a 99 per cent collection rate and £6.356m represents one per cent of council tax in the past 14 years.

He added: ‘We have understanding for those who are in genuine difficulties.

‘But I can understand that residents feel it is totally unfair when there are those who choose not to pay (council tax) to support services.’

Cllr Hook said the budget is set on the basis of how much council tax can be raised and, if it is not, then raising council tax or cutting services is a reality.

Councillor Luke Stubbs, deputy leader of Portsmouth City Council, said the rate of non-payment in the city has halved over the last two years – even though the amount due has gone up.

The amount owed in 2013/4 was £13.4m, and the amount owed in the last financial year was £13.2m.

Councillor Sean Woodward said Fareham’s collection rate is excellent adding, ‘In all cases we endeavour to collect all council tax due to the authority. We are always willing to discuss payment if someone is having difficulties.’

Seek advice as soon as you start struggling to pay

COUNCILS say they pursue people through the courts for unpaid council tax as a last resort and try to work with them to get the debt paid off. They say that council tax is a priority debt and should not be ignored. The advice is to contact the council if you are having trouble paying.

Charities such as the Citizens Advice Bureau and National Debtline work with local authorities to help people who are struggling to pay. Councils have hardship funds which can be used in exceptional circumstances. Housing associations also have debt advice teams.

Go to nationaldebtline.org or call 0808 808 4000. Alternatively, go to citizensadvice.org.uk or call (023) 9285 5855.