COUNCIL tax debt is the fastest-growing form of debt, Citizens Advice reported yesterday, revealing that it has now become the number one debt problem poor families are facing.
One in five people reporting debt problems to Citizens Advice has a council tax arrears issue, said the charity.
Since the national Council Tax Benefit was abolished by the Tory coalition in April 2013, replacing it with localised Council Tax Support schemes, Council Tax debt has rocketed.
Council Tax Support is supposedly available to people in and out of work, but levels vary widely from one council to the next.
Out of the 325 councils in England, 244 now require all working age households to pay at least some council tax, regardless of income. In the first three months of this year, 27,000 people with a council tax arrears problem got help from Citizens Advice – a 17 per cent increase on the same period last year.
Council tax arrears are a serious problem both for in-work and out-of-work households. Between January and March 2014, 42 per cent of those approaching Citizens Advice for help with council tax arrears were employed, compared to 28 per cent unemployed.
Gillian Guy, Citizens Advice Chief Executive, said: ‘For some households council tax bills can be the tipping point that plunges them into debt. ‘Last year over 90,000 people came to Citizens Advice looking for help with council tax arrears as they struggle in the face of low incomes, rising prices and reduced financial support.
‘Consumer debts like credit cards and personal loans have traditionally been the most common debt problems that come through our doors, but since the end of Council Tax Benefit we’ve seen council tax arrears problems go through the roof.
‘As their budgets shrink, local authorities are increasingly stretched, but they must ensure that the resources available for their local Council Tax Support scheme are focussed on those who are most in need.’
The analysis carried out by the charity found that people coming in with council tax issues are struggling with other debts too:
• 1 in 6 (16 per cent) had a credit, store & charge card issue
• in 5 (21 per cent) had also had an unsecured personal loan issue
• 1 in 20 (5 per cent) had a mortgage & secured loan arrears issue
• 1 in 5 (18 per cent) had a fuel debt issue.
The debt charity StepChange has also reported a huge 77% rise in the number of households needing advice on council tax arrears this year.