Written evidence submitted by Bristol City Council [CTC 040]

Do there need to be changes in the practice employed by local authorities to collect council tax
arrears?

Bristol City Council (BCC) constantly tries to evolve our practice, to ensure we best respond to
external changes. COVID-19 has had a seismic change which will have a medium to long term impact
and as such requires changes in the practices employed in the collection of council tax arrears.

Councils have a legal duty to effectively collect and recover outstanding debts alongside a wide
range of social responsibilities which means we should also have regard to minimising arrears whilst,
at the same time, not causing undue hardship or consequences to the indebted customer as a result
of the overall approach or multiple debt.

We would recommend a strengthening of practice statements / guidance notes to require

appropriate due regard to be given to indebted customers who are vulnerable or temporarily
vulnerable and adoption of an ethical approach or specific actions when vulnerability has been
identified.

For example:

 Due regard must be demonstrably given to customers who are vulnerable or temporarily
vulnerable with some common indicators of vulnerability outlined. Specific actions could
include opening up a dialogue with indebted customers to more appropriately consider their
needs and circumstances, work with third sector advice agencies and partnership to more
robust affordability assessments and devising a payment plan that is sustainable for
indebted customers.
 In some instances, customers will owe more than one debt to the council. Councils should
adopt a coordinated approach when dealing with multiple debts, consider the person’s
circumstances, legislation, the level and priority of debt and the potential for financial
hardship.
 Debts considered as priority debts are those debts owed to creditors who can take the
strongest legal action (for example, the loss of the primary residential home, imprisonment,
or loss of essential goods) against an individual who does not pay. The practice statements /
guidance notes should indicate that where the council or its collection agent is pursuing
multiple debts, unless the customer advises to the contrary, priority should be given to debts
where non-payment could lead to loss of the customer’s home or have direct implications
upon an individual’s health and wellbeing.

What examples are there of local authority best practice in respect of council tax arrears collection
– and what has the impact of this practice been?

The Council’s caseload of Council Tax arrears is large and the ethical approaches being adopted too
early in their implementation to accurately measure specific individual impacts from the
interventions. Additionally, the COVID-19 pandemic has resulted in a pause in some of the
approaches and significantly changed the situation.
Below is an overview of some of the Council’s practices:

 Our local Council Tax Reduction scheme continues to provide up to 100% discount on bills
for households on the lowest incomes. In practice this means households with arrears that
the Council are pursuing would not be in the lowest income bracket. The Council still
acknowledges this does not simply mean all these households are able to easily pay –
therefore, we work together with indebted customers to devise payment plans.

 Good lines of communication with indebted customers and all Bristol households are key, to
ensure that payments are kept in mind and not forgotten about. Repeated messaging e.g,
gentle nudge via text or soft reminders reinforces the fact that payments are due,
encourages engagement and support.

 The Council has employed specific outreach officers, who work both in the office as well as
directly in the community to work with indebted customers in understanding their
circumstances and devising affordable and sustainable payment plans.

 We will also make direct referrals to PACE | The Money and Pensions Service.

The Council does not currently hold sufficient data that would evidence a link between these
approaches and incoming contact/payment but would like to further invest in monitoring and single
view of the customer / debt across the council. It needs to be acknowledged that there is also an
additional cost to consider in adopting these approaches which in the long term we anticipate will
reduce debt levels, write-offs and improve wellbeing, but would welcome additional administration
support to enable these approaches to be scaled up and accelerated.

What is your assessment of the August 2021 government guidance on best practice for council tax
collection?

This was well considered advice; however, a large majority of the guidance reflects practice that was
already in place.

Do there need to be changes to the legislation on the recovery of council tax arrears?

The Council would support changes being made to the legislation on the recovery for council tax
arrears, for several reasons. The option to commit to prison is out of date and should be removed. It
is unlikely to be a deterrent due to being so rarely applied - within Bristol, it hasn’t been acted upon
within the last ten years. If this were to be abolished, there would need to be a range of alternative
sanctions put in its place, for example, exploring community orders and bank arrestment’s,
particularly given other debts already have these sanctions in place without a court order.

The Council would support reducing the need for a liability order. Under the current system, the
Council must summons indebted customers and obtain a liability order, simply to confirm the council
tax debt is due from that particular customer, from the court before we are allowed to take any
form of enforcement action.
Subject to other safeguards continuing in place (e.g., appeals process), the Council would want to be
able to take some types of enforcement action without the need to go through a court process first.
For example, obtaining a financial statement attached to earnings and/or benefits. For this to take
place, there would need to be changes to the law requiring indebted customers to provide local
authorities information about their employment details.

How do the different schemes of local authority council tax support affect council tax collection
rates?

Having an effective and appropriately targeted local Council Tax Reduction Scheme has allowed the
Council to focus our resources at those who have the means to pay and choose not to and pre covid
achieve collection rates including arrears of 98.5%. The Council’s Revenues department have
mapped CTR application and evidence take up in areas of greatest deprivation in the city and noticed
an anecdotal trend that the majority of lower incomes who have a reduced amount of council tax to
pay, due to our reduction scheme, manage to keep on top of their payments through effective
budgeting.

January 2022