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Bailiff usage soars by nearly 50% as council debt blackhole hits £2.4bn, figures show

22 May 2024, 08:02

Bailiff Debt Collector At Door In Mask
Bailiff usage has risen, LBC can reveal. Picture: Alamy

By Helen Hoddinott

Councils across the UK handed at least £2.4bn of unpaid council debts to bailiffs last year, a surge of nearly 50% compared to 21/22, LBC can reveal.

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Enforcement agents managed to recoup less than a fifth of that debt, as people struggled to pay their bills during the cost of living crisis.

LBC asked local authorities about the amount of unpaid debt they’ve passed on to enforcement agents in the last three financial years. This included bills for council tax, parking fines, non-payment of business rates and housing arrears.

The uncollected debt is exacerbating the pressure on councils’ finances.

Of the 235 which provided their data, 70 asked enforcement agents to recoup more than £10m last year, with two chasing debts of more than £100m.

Based on the data from these responses, the overall blackhole in council finances caused by this issue could be as high as £3.8bn.

“Up to 50% of councils fear that if nothing changes, they could go bust over the next five years,” Jonathan Carr-West, CEO of the Local Government Information Unit, said.

“That would be a terrible, terrible outcome for millions of citizens.”

Carr-West says crumbling council finances directly impacts their ability to deliver essential services like adult social care and children’s services.

“[These are not] optional extras, they are literally life and death services,” he tells us. “This is before we even start talking about all the things that we all benefit from; street lighting, parks, swimming pools, clean streets.”

The figures differ dramatically from council to council. Birmingham City Council, which effectively declared bankruptcy last year, instructed bailiffs to collect £194m in 23/24, the most of any local authority and an increase of nearly 240% in just two years.

Bailiffs managed to collect £22m of that - just 11% of what was owed, and their conduct resulted in 562 complaints from residents over the last three years.

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Birmingham City Council effectively declared bankruptcy last year.
Birmingham City Council effectively declared bankruptcy last year. Picture: Alamy

Though the council said it “expect[s] the highest standards of the debt recovery companies” and that it will always investigate complaints it receives, the aggressive behaviour from some bailiffs is a concern across the country.

LBC’s figures show thousands of complaints were made to councils over the last three years about the conduct of such enforcement agents.

Citizens Advice says one in three people who have been contacted by bailiffs during the cost of living crisis have experienced behaviours that broke the rules, including threatening to break into their home, forcing entry, dealing unsympathetically with disabilities or illnesses, or taking goods required for their medical care or work.

“All too often we see bailiffs being sent round to people who are in really vulnerable situations,” Rachel Beddow, policy manager for Citizens Advice said.

“[Perhaps] they've got a child in the house or they're facing additional difficulties and they don't have the money to repay. That person needs support, they need a repayment plan put in place that they can manage so they can get back on their feet and rather than being pushed further into crisis.”

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Florence was visited by a bailiff when her council erroneously chased her for around £6,000 of council tax debt - a bill she had already paid.

She said the process made her feel like a “completely terrorised” cornered animal.

According to Florence, the bailiff watched her home until he saw her partner leave, and then approached the property, wearing a uniform which made him “look pretty much like a police officer.”

“Your home is where you should feel safe… the way they try to intimidate you, the psychological terror should not be legal.”

Government reforms in 2014 promised to “to stop rogue bailiffs making lives a misery.”

But CIVEA, which represents enforcement companies, has said that promises to overhaul the payment structure for enforcement agents have been missed.

Bailiffs are not paid by councils to recoup their debt and make money on fees charged to the debtors - a system which debt charities warn can incentivise enforcement agents to use aggressive tactics.

Russell Hamblin-Boone is the CEO of CIVEA, and has said bailiffs are “professional people doing a difficult job and often in challenging circumstances.”

“All enforcement agents wear body-worn video cameras, for example, which are checked regularly to make sure that they're conducting themselves appropriately…and agents are highly trained to deal with all sorts of situations, whether that's someone with poor mental health or someone who's acting violently.”

He says enforcement agents are facing an ever-growing workload as a result of council debt going up, and says the industry is working to put standards in place through the Enforcement Conduct Board (ECB), which was set up in 2022.

However, the board doesn’t have statutory powers, meaning it can’t punish behaviour that breaks its code of conduct,

The board’s CEO Chris Nicholls says they’re going to “go out and monitor and supervise behaviour”, and that bailiffs found behaving badly could either have their certificate removed, or see action taken against the firm they work for.

Manchester City Council changed its policy earlier this year to exempt all residents eligible for Council Tax Support from bailiff action.
Manchester City Council changed its policy earlier this year to exempt all residents eligible for Council Tax Support from bailiff action. Picture: Alamy

With LBC’s figures showing a dramatic increase in the amount of council debt being passed to bailiffs year-on-year, there are renewed calls for a system overhaul.

“[LBC’s] data shows that the numbers are still increasing and I think something really, really has to give,” says Joe Cox, senior policy officer at Debt Justice.

“Because of the widespread bad practice that bailiffs are involved in, councils should be doing everything they can to not call them in.”

He points to Manchester City Council, which changed its policy earlier this year to exempt all residents eligible for Council Tax Support from bailiff action.

Meanwhile, Hammersmith and Fulham council completely stopped using bailiffs for council debts in 2018 in favour of an “ethical approach”, which uses manageable payment plans and helps residents to avoid falling into debt.

The council expects to collect 97% of the council tax they are owed in 24/25, which is above the national average.

In 2019 Rishi Sunak, then Local Government Minister, declared a commitment to “making the Council Tax collection system fairer and more efficient.”

But for Florence, the memory of being visited by bailiffs still causes her anxiety.

“I can still feel a chill running down my spine,” she tells LBC. “It shouldn’t be allowed to happen.”

A Government spokesperson said: “It is important that councils are sympathetic to those in genuine hardship, are proportionate in enforcement and do not overuse enforcement agents.

“Every council is required to have a council tax support scheme to protect residents facing financial hardship and we expect councils to consider other options before moving towards the use of enforcement action.”

The Local Government Association told us: “Councils know how difficult the rising cost of living is for so many people and strive to recover unpaid tax as sympathetically as possible.

“Bailiffs should only ever be used as a last resort and before it gets to that stage, people will have been encouraged by their council to apply for financial support.

“Local welfare schemes run by councils, including council tax relief and the Household Support Fund, are available alongside targeted government help. Rising demand means this may only offer short-term relief to struggling households, amid an ongoing cost of living crisis and continuing funding pressures.

“Anyone having trouble paying their council bills should get in touch with their local authority for financial help and advice as soon as possible.”

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