Event recap: launching our research on public sector debt collection

Recently we published our second piece of research on the psychological impact of debt collection practices – In the public interest? This report looks at public sector debt collection, and our launch event shone a light on council tax debt collection, highlighting the fast and aggressive escalation of charges and legal procedures. 

We heard a powerful set of speeches and it was a great opportunity to share our research and hear from those involved and impacted by current practices.

The event was hosted by our Chair and Founder Martin Lewis. Martin gave an impassioned speech calling attention to the severity of public sector debt collection practices, taking aim at council tax specifically. Our report shows 6.2 million people in the UK are behind on payments to local or national government, and details the aggressive collect practices councils then use to recover these payments. Martin gave a stark reminder to any councillors listening – “you have constituents, not customers.” 

As Martin pointed out, it’s an open secret, particularly for debt advice charities, that public sector debt collection practices are among the worst. It is currently the most vulnerable who bear the brunt of aggressive collection practices, and it can be particularly debilitating for those of us with mental health problems.

Martin then handed over to Francesca Smith, our Research Officer and co-author of the report, and Sharon, a member of our Research Community who generously agreed to be interviewed about her experiences. She was asked about what happened when she fell into council tax arrears. She received a letter on Christmas Eve two years ago after missing a single payment. The seven day deadline was dated from when the letter was first sent so – in reality – Sharon had to pay the bill by the following day, Christmas Day.

Sharon explained how she had to take out a credit card to pay off that council tax debt at short notice – and then how she fell into the vicious cycle of money and mental health problems as a result.

Our next speaker was Clive Betts MP, who served as Chair of the Housing, Communities and Local Government Select Committee for over a decade. Clive acknowledged the financial pressures on councils, but ultimately agreed that there are no excuses for these practices. He spoke about the need for financial support through debt advice services before escalating to bailiffs and court fines. When leaving the stage, he made a promise to put these issues to the Deputy Prime Minister, providing more hope for change.

Next our Senior Research Officer, Toby Murray – who co-authored the report – delved into the findings. He took us on a journey through what he called the Council Tax Trap. Starting with a single missed payment, councils send one reminder payment with a 7 day deadline. If missed, a final notice is sent to pay for a full year of bills, again within 7 days. In 3 weeks someone can go from owing £100-200 to owing over £1,000. 

Councils then continue the ruthless escalation through legal processes such as liability orders, at steep cost to the constituent. Within a matter of weeks a bailiff can be sent out, with the potential for prison only slightly further down the line. Toby ended by emphasising that this process is not only needlessly aggressive, but also ineffective – as greater bailiff use is correlated with lower collection rates.

Our penultimate speaker was Vikki Brownridge, CEO of StepChange debt advice charity. As someone working with those in problem debt, Vikki has a wealth of knowledge about how damaging public sector debt collection can be. 

She highlighted that Sharon’s experiences are not unique, with a third of StepChange clients being in council tax arrears. She shared our dismay at council tax bills increasing, but support for these bills decreasing, before ending with a clear call to the government – support councils to support people.

Our final speaker was Councillor Saima Ashraf, deputy leader of the Barking and Dagenham council. She laid the landscape of her community and the pressures her residents face. 

Councillor Ashraf explained some of the ways that her Borough is reducing aggressive debt collection practices. Instead of using external bailiff services, she set up an in-borough collection team, designed to have a holistic approach, offering support and advice instead of incessant escalation. The results? A 6 year high of council tax debt collection and a reduction in complaints – showing that there are alternatives to the current system.

We want to thank Martin, all of our speakers and our guests for making this launch event as a success. By shining a light on the cruel public sector debt collection practices we hope to see change on a local and national government level. 

The changes we are calling for would lend more support to those in council tax arrears, and lead to fewer people falling into the Council Tax Trap. You can read more about the report here, and you can sign our petition today to play your part.