The use of bailiffs to collect debts owed to local authorities in England and Wales has jumped 14 percent in two years, according to new research by the Money Advice Trust.
The new research paper, Stop the knock, found bailiff use increased for all major types of debt between 2014/15 and 2016/17. The number of council tax debts passed to bailiffs was up 10 percent, parking referrals rose 27 percent and referrals for housing benefit overpayments were up 20 percent.
Despite government guidance stating that bailiff action should only ever be used as a last resort, research found more than 2.3 million debts were passed to bailiffs by local authorities in 2016/17.
However, the Money Advice Trust said an increasing number of councils are working hard to improve their debt collection practices – and that four in 10 councils reduced their reliance on bailiffs between April 2016 and March 2017.
The research found that, of the councils surveyed, 97 percent signpost residents in financial difficulty to free debt advice, and 50 councils have now signed up to the Local Government Association’s joint council tax protocol with Citizens Advice.
In addition, 23 councils in England have introduced a policy of exempting residents on the lowest incomes, who receive council tax support, from bailiff action altogether.
Nevertheless, almost half (44 percent) of councils have no formal policy for dealing with residents in vulnerable circumstances when collecting debts – and while the vast majority signpost residents to free debt advice, 10 councils reported that they did not take even this basic step.
Joanna Elson OBE, chief executive of the Money Advice Trust, said: “The growing use of bailiffs to collect debts by many local authorities is deeply troubling. Councils are under enormous financial pressure, and they of course need to recover what they are owed in order to fund vital services.
“However, many councils are far too quick to turn to bailiff action – which we know can seriously harm the wellbeing of residents who are often already in vulnerable situations. It can also push people even further into debt.”
The Money Advice Trust has today (November 14) published the results of its research on a new online map along with six steps for local authorities to take to improve their practices:
- Make a clear public commitment to reduce bailiff use over time
- Review signposting to free debt advice, including phone/online channels
- Adopt the Standard Financial Statement to objectively assess affordability
- Put in place a formal policy covering residents in vulnerable circumstances
- Exempt Council Tax Support recipients from bailiff action (in England)
- Sign up to the Citizens Advice/LGA Council Tax Protocol and examine the Money Advice Service’s toolkit for working with debt advice agencies
The Money Advice Trust is also writing to the Minister for Local Government, Marcus Jones MP, to ask for his support in encouraging councils to improve.