Charity warns of council tax debt ‘explosion’ in 2021

Citizens Advice Scotland said council tax is the debt issue it deals with most frequently.

Charity warns of council tax debt ‘explosion’ in 2021 Getty Images

A charity is warning of a council tax debt “explosion” in 2021, fearing the coronavirus pandemic will exacerbate arrears.

Citizens Advice Scotland said council tax is the debt issue it deals with most frequently.

In 2019/20, 2257 people sought help from the Citizens Advice network with a complex debt issue involving council tax, owing a cumulative £6.8m in arrears.

A complex debt issue is where someone owes multiple debts.

The average debt owed was £3020 – more than double the average council tax bill of £1201.

Citizens Advice Scotland financial health spokesman Myles Fitt said: “Scotland is potentially facing an explosion of council tax debt in 2021.

“The figures before the pandemic are bad enough, but the real fear is that Covid-19 is going to make matters much worse.

“Councils across Scotland showed a real empathetic approach to those who found themselves in council tax payment difficulties, and the payment breaks in the first six months of the pandemic were extremely welcome.

“However this has led to arrears building up, arrears that will be difficult to meet for the many people who have during that period experienced an income drop due to unemployment or reduced working hours.”

He said for others, the problem is yet to come in 2021 when the furlough scheme and payment support measures stop at the end of April.

Mr Fitt added: “Action is required to stop council tax debt – already the number one debt issue the Citizens Advice network sees – becoming an even bigger problem.

“Citizens Advice Scotland would like to see those who have fallen into council tax debt solely because of an economic consequence of Covid-19 be given some sort of help.

“This could be through the Scottish Government undertaking to meet the costs of writing off such debt, the establishment of a Council Tax Hardship Fund, or through the long-term continuation of supportive forbearance by local authorities.”

He urged people to check if they are entitled to council tax savings, reductions, discounts or exemptions – such as the Scottish Government’s Council Tax Reduction Scheme (CTR) – through the charity’s online tool.

A Scottish Government spokesman said: “The Council Tax Reduction Scheme means nobody has to endure financial difficulties because they have lost their ability to pay their council tax – including those impacted by coronavirus.

“The pandemic and the resulting economic hardship has led to an increase in CTR caseload, with just under 500,000 households now receiving some level of reduction. On average, recipients save over £700 a year. 

“We have allocated £25m to councils to help them meet the increased costs of the CTR scheme in addition to the £351m we already provide.

“During the pandemic we have asked local authorities to use their powers to backdate CTR applications by up to six months and not to take enforcement action until they are satisfied that the household concerned has not had its income impacted by the pandemic, or would likely be entitled to a reduction.”

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