Recommendations & Conclusions
21 items
1
Conclusion
Second Report - Council Tax Collection
Accepted
The Council Tax (Administration and Enforcement) Regulations 1992 requires the year’s unpaid council tax balance to become payable in certain circumstances. This provision, and the speed with which it is applied, can be the catalyst for someone’s debts to quickly escalate. It is not clear, however, how much discretion local …
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The Council Tax (Administration and Enforcement) Regulations 1992 requires the year’s unpaid council tax balance to become payable in certain circumstances. This provision, and the speed with which it is applied, can be the catalyst for someone’s debts to quickly escalate. It is not clear, however, how much discretion local authorities have to agree repayment plans that spread the value of the unpaid balance over the rest of the year. The council tax collection best practice guidance, published by the Department for Levelling Up, Housing and Communities, strongly implies that local authorities do not have to demand immediate payment in full, but evidence from stakeholders suggests that this message is not getting through.
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Government response AI summary
The government acknowledges the committee's concern about clarity regarding council discretion for council tax repayment plans and commits to writing to all councils to stress their flexibility and encourage affordable repayment plans.
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Ministry of Housing, Communities and Local Government
2
Recommendation
Second Report - Council Tax Collection
Accepted
We strongly urge the Government to clarify the provision in the Council Tax (Administration and Enforcement) Regulations 1992 that requires the unpaid balance to become payable in certain circumstances. If local authorities do, under this provision, have the discretion not to require immediate repayment of the full unpaid balance, the …
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We strongly urge the Government to clarify the provision in the Council Tax (Administration and Enforcement) Regulations 1992 that requires the unpaid balance to become payable in certain circumstances. If local authorities do, under this provision, have the discretion not to require immediate repayment of the full unpaid balance, the Government should make this much clearer, either by updating the regulations or by amending the best practice guidance by the end of this Parliament.
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Government response AI summary
The government acknowledges the need for clarity regarding council discretion on council tax repayment timelines and commits to writing to all councils to stress their flexibility and encourage affordable repayment plans.
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Ministry of Housing, Communities and Local Government
3
Recommendation
Second Report - Council Tax Collection
Accepted in Part
In addition, by the end of this Parliament, the Government should amend existing regulations to enshrine in law the principle that collection should be based on a resident’s ability to pay, including by requiring local authorities to offer people affordable repayment plans when an unpaid balance becomes payable.
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In addition, by the end of this Parliament, the Government should amend existing regulations to enshrine in law the principle that collection should be based on a resident’s ability to pay, including by requiring local authorities to offer people affordable repayment plans when an unpaid balance becomes payable.
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Government response AI summary
The government partially accepts the recommendation by committing to write to all councils to stress their discretion in offering flexible payment timelines and encouraging affordable repayment plans, but it does not commit to amending existing regulations to enshrine this principle in law.
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Ministry of Housing, Communities and Local Government
4
Recommendation
Second Report - Council Tax Collection
Accepted
The process for obtaining a liability order is inefficient and can hinder, rather than aid, the collection of unpaid council tax. We therefore strongly recommend that the Government make the liability order process less burdensome, including by allowing bulk applications, virtual applications, or both, so long as residents remain able …
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The process for obtaining a liability order is inefficient and can hinder, rather than aid, the collection of unpaid council tax. We therefore strongly recommend that the Government make the liability order process less burdensome, including by allowing bulk applications, virtual applications, or both, so long as residents remain able to raise objections. (Paragraph 21) Supportive council tax collection
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Government response AI summary
The government states that bulk applications for council tax liability orders have been common practice since 1992, and virtual hearings are already lawful and remain an available option for magistrates’ courts.
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Ministry of Housing, Communities and Local Government
5
Conclusion
Second Report - Council Tax Collection
Acknowledged
We are concerned that the threat of enforcement might mean people are putting their council tax payments ahead of heating and eating. In particular, we believe the ultimate sanction of imprisonment is using a sledgehammer to crack a nut.
Government response AI summary
The government acknowledges the committee's concerns regarding the threat of enforcement and imprisonment for council tax non-payment, explaining that imprisonment is a rarely used sanction for those who can but wilfully refuse to pay, with existing safeguards in place.
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Ministry of Housing, Communities and Local Government
6
Recommendation
Second Report - Council Tax Collection
Rejected
The Government should amend existing regulations by the end of this Parliament to replace the sanction of imprisonment with more suitable deterrents, such as bank arrestment or community service.
Government response AI summary
The government implicitly rejects the recommendation, defending the existing sanction of imprisonment for wilful non-payment of council tax as a rarely used but necessary tool, and states there are protections in place for residents.
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Ministry of Housing, Communities and Local Government
7
Conclusion
Second Report - Council Tax Collection
Accepted
The localisation of council tax support, and local government’s increasing reliance on revenue from council tax, has put local authorities in the difficult situation of occasionally having to collect council tax arrears from those in financial need. In this context, it is all the more important that their approaches to …
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The localisation of council tax support, and local government’s increasing reliance on revenue from council tax, has put local authorities in the difficult situation of occasionally having to collect council tax arrears from those in financial need. In this context, it is all the more important that their approaches to enforcement take account of individuals’ ability to pay. (Paragraph 39) 36 Council Tax Collection
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Government response AI summary
The government acknowledges the committee's views and responds by outlining the existing statutory framework for council tax collection, which includes multiple communications and allows councils the discretion to offer flexible repayment arrangements and assess discounts, suggesting current practices already take account of an individual's ability …
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Ministry of Housing, Communities and Local Government
8
Conclusion
Second Report - Council Tax Collection
Accepted
Council tax is unlike other debt, in that it recurs annually, so it is in the interests of residents that arrears be collected swiftly so they do not quickly escalate. However, if an individual genuinely cannot afford to pay, rushing to take recovery or enforcement action will only waste a …
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Council tax is unlike other debt, in that it recurs annually, so it is in the interests of residents that arrears be collected swiftly so they do not quickly escalate. However, if an individual genuinely cannot afford to pay, rushing to take recovery or enforcement action will only waste a local authority’s resources, cause avoidable distress to the individual in financial need, and miss an opportunity to give appropriate debt advice.
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Government response AI summary
The government acknowledges the committee's views and outlines the existing statutory framework and guidance for council tax collection, which allows councils flexibility for repayment arrangements and assessing discounts, suggesting current practices align with the spirit of the conclusion. It also confirms no plans for a …
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Ministry of Housing, Communities and Local Government
9
Recommendation
Second Report - Council Tax Collection
Rejected
The council tax collection best practice guidance, issued by the Department for Levelling Up, Housing and Communities in 2021, does not set out specific standards expected of local authorities. We agree with the Government that local authorities’ need some discretion, but we see no reason why a statutory code of …
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The council tax collection best practice guidance, issued by the Department for Levelling Up, Housing and Communities in 2021, does not set out specific standards expected of local authorities. We agree with the Government that local authorities’ need some discretion, but we see no reason why a statutory code of practice would unnecessarily constrain local authorities’ decision making.
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Government response AI summary
The government rejects the implicit recommendation for a statutory code of practice, stating it has no plans to replace existing guidance with a statutory code and prefers local authorities to retain discretion.
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Ministry of Housing, Communities and Local Government
10
Recommendation
Second Report - Council Tax Collection
Rejected
We recommend that the Government replace the council tax collection best practice guidance with a statutory code of practice, to which local authorities would have to have regard. Among other things, this code of practice should set out what steps local authorities should take before applying for a liability order, …
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We recommend that the Government replace the council tax collection best practice guidance with a statutory code of practice, to which local authorities would have to have regard. Among other things, this code of practice should set out what steps local authorities should take before applying for a liability order, including the making of affordable repayment plans in which the unpaid balance is spread over the year. If the Government does not do this, it should say why not when it responds to our Report, and explain what measures it will implement to ensure best practice is followed.
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Government response AI summary
The government rejects the recommendation to replace existing council tax collection guidance with a statutory code of practice, asserting that a clear statutory framework is already in place for councils, offering flexibility for repayment and support.
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Ministry of Housing, Communities and Local Government
11
Recommendation
Second Report - Council Tax Collection
Not Addressed
The use of enforcement agents to collect unpaid council tax should always be a last resort, so we were pleased to hear that many councils and debt collectors engage with residents to collect arrears without needing to take enforcement action, and that some have a policy of never using agents …
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The use of enforcement agents to collect unpaid council tax should always be a last resort, so we were pleased to hear that many councils and debt collectors engage with residents to collect arrears without needing to take enforcement action, and that some have a policy of never using agents against those in receipt of council tax support. We accept enforcement agents will sometimes be needed, in the case of those who wilfully refuse to pay, but it can never be justified in the case of those who genuinely cannot afford to pay. We urge the Government to direct local authorities to give it extra careful consideration before using enforcement agents against those in receipt of council tax support and in call cases to demonstrate they have exhausted alternative collection methods before resorting to enforcement agents.
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Government response AI summary
The government's response outlines existing collection processes and councils' flexibility but does not commit to directing local authorities on the careful consideration or exhaustion of alternative methods before using enforcement agents, particularly for those receiving council tax support.
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Ministry of Housing, Communities and Local Government
12
Conclusion
Second Report - Council Tax Collection
Accepted
We welcome the establishment of the Enforcement Conduct Board (ECB), and, most recently, the launch of its accreditation scheme, but we regret that the ECB is dependent for its funding on a voluntary industry levy. We are concerned that industry support for the ECB in principle might not be matched …
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We welcome the establishment of the Enforcement Conduct Board (ECB), and, most recently, the launch of its accreditation scheme, but we regret that the ECB is dependent for its funding on a voluntary industry levy. We are concerned that industry support for the ECB in principle might not be matched by the voluntary financial contributions needed in practice to make the ECB a reality. There is considerable merit in putting the ECB on a statutory footing, so we are pleased the Government has committed to a review of this within two years of the ECB’s establishment. This will be in November 2024.
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Government response AI summary
The government broadly agrees with the committee's points, confirming its commitment to launch a review on statutory underpinning for the ECB and stating DLUHC will write to local authorities encouraging them to use ECB-accredited firms.
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Ministry of Housing, Communities and Local Government
13
Recommendation
Second Report - Council Tax Collection
Accepted in Part
In preparation for this review, we recommend that the Government start to collect the necessary data, so that it has a strong evidence base on which to make a decision, and that it keep us updated on the progress of the review. In the meantime, it should require all local …
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In preparation for this review, we recommend that the Government start to collect the necessary data, so that it has a strong evidence base on which to make a decision, and that it keep us updated on the progress of the review. In the meantime, it should require all local authorities only to employ enforcement agencies registered with the Enforcement Conduct Board. (Paragraph 65) Council Tax Collection 37 Date collection
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Government response AI summary
The government agrees to update the committee on the upcoming review process, including data collection methodology. While not requiring local authorities to use ECB-registered firms, DLUHC will write to councils encouraging them to use accredited firms.
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Ministry of Housing, Communities and Local Government
14
Conclusion
Second Report - Council Tax Collection
Accepted
We welcome the many initiatives, by local and central government, aimed at improving data sharing, particularly the pilots being carried out under the Digital Economy Act 2017 and the creation of the Office for Local Government; but overall we remain concerned that barriers to data sharing are impeding councils’ efforts …
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We welcome the many initiatives, by local and central government, aimed at improving data sharing, particularly the pilots being carried out under the Digital Economy Act 2017 and the creation of the Office for Local Government; but overall we remain concerned that barriers to data sharing are impeding councils’ efforts to identify vulnerable residents. Being able to identify and engage with residents who are at risk of falling into arrears at an early stage will help to prevent residents from building up problem debt and will also improve collection rates. We are especially concerned that some local authority data protection officers might not fully understand the circumstances in which information concerning vulnerable individuals may be shared between teams.
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Government response AI summary
The government describes ongoing efforts to improve data sharing with councils, including increasing data scope, delivering improvements to shared data by summer 2024, ensuring councils are aware, and exploring legislative amendments, to help councils identify residents in hardship.
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Ministry of Housing, Communities and Local Government
15
Recommendation
Second Report - Council Tax Collection
Accepted in Part
The Government should not wait for local authorities to approach the Cabinet Office to learn how they can make better use of data sharing, but instead create an environment where this happens easily and consistently. We recommend that: • an application for universal credit automatically trigger an application for local …
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The Government should not wait for local authorities to approach the Cabinet Office to learn how they can make better use of data sharing, but instead create an environment where this happens easily and consistently. We recommend that: • an application for universal credit automatically trigger an application for local council tax support; • the memorandum of understanding between HMRC and DWP be reviewed so that council teams can share relevant benefits data with their council tax teams; • the Digital Economy Act pilots be rolled out more widely; and • the Government consider further ways of enabling and encouraging greater data sharing between different groups for the purpose of identifying residents who are at risk of falling into council tax arrears; this may require the Information Commissioner’s Office either to clarify the relevant provisions of its data-sharing code of practice, or to raise awareness of it within local government, if there is evidence of an overly cautious approach being taken to data sharing within local authorities.
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Government response AI summary
The government rejects the recommendation for universal credit applications to automatically trigger local council tax support applications due to potential bureaucracy. However, it outlines ongoing and planned actions to improve data sharing between DWP and councils, including increasing the scope of MOUs, delivering data improvements, …
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Ministry of Housing, Communities and Local Government
16
Conclusion
Second Report - Council Tax Collection
Rejected
The Minister said it was for local authorities to understand the drivers of council tax arrears in their areas, but we believe that central government has a vital role to play in building a national picture of the causes of arrears and in understanding how causes of arrears vary between …
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The Minister said it was for local authorities to understand the drivers of council tax arrears in their areas, but we believe that central government has a vital role to play in building a national picture of the causes of arrears and in understanding how causes of arrears vary between local areas. We are particularly concerned that the Government has no data on how the level of council tax arrears in an area correlates with the prevalence of short-term private accommodation, where tenants may well move on before the council is able to collect the council tax owed. We are also not satisfied that the Government adequately understands the relationship between levels of council tax arrears and local council tax support schemes. Central government developing a better understanding in this area is not incompatible with localism. In fact, it could support localism by helping councils to adjust their schemes and so reduce arrears.
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Government response AI summary
The government rejects the committee's concern that it lacks a national understanding of council tax arrears, stating that the complexity of local schemes and factors makes formal research unhelpful, and it has no plans to collect further data due to burdens on councils.
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Ministry of Housing, Communities and Local Government
17
Recommendation
Second Report - Council Tax Collection
Rejected
The Government should carry out and publish research to assess different types of local council tax support schemes and how they relate to council tax arrears. In addition to collection rates and levels of arrears, the Government should also publish local authority level data on: methods used to engage with …
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The Government should carry out and publish research to assess different types of local council tax support schemes and how they relate to council tax arrears. In addition to collection rates and levels of arrears, the Government should also publish local authority level data on: methods used to engage with debtors; collection methods; the 38 Council Tax Collection number of affordable repayment plans set up; and reasons for arrears. The new Office for Local Government should have a role in collecting, analysing and publishing this data.
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Government response AI summary
The government rejects the recommendation to carry out research and publish local authority data on council tax support schemes and arrears, stating such research would not be useful and collecting the data would burden councils.
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Ministry of Housing, Communities and Local Government
18
Recommendation
Second Report - Council Tax Collection
Deferred
We are closely monitoring the establishment of the Office for Local Government which we believe could help to improve the functioning of local government. However, it is regrettable that the Secretary of State has not yet confirmed that the position of Oflog Chair will be subject to pre-appointment hearing by …
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We are closely monitoring the establishment of the Office for Local Government which we believe could help to improve the functioning of local government. However, it is regrettable that the Secretary of State has not yet confirmed that the position of Oflog Chair will be subject to pre-appointment hearing by our Committee, despite our having first written to him about this matter in January 2023. We also find it regrettable that that Oflog does not yet have a permanent Chair. We consider the position of Oflog Chair to be critical to the functioning of local government and believe that Oflog, more widely, has a vital role to play in supporting taxpayers. We urge the Secretary of State to confirm in writing immediately that the position of Oflog Chair will be added to the list of posts subject to pre-appointment hearings by our Committee. (Paragraph 88) Council tax reform
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Government response AI summary
The government defers confirming that the Oflog Chair position will be subject to pre-appointment scrutiny, stating the Department will consider if the role meets the criteria as part of its preparations for appointing a permanent Chair.
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Ministry of Housing, Communities and Local Government
19
Conclusion
Second Report - Council Tax Collection
Rejected
The entire system for collecting council tax is outdated and not meeting its desired purpose. This has become increasingly problematic because councils are becoming ever more reliant on council tax for their budgets. In 2015/16, council tax made up 49.1% of core spending power. It now makes up 56.9% of …
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The entire system for collecting council tax is outdated and not meeting its desired purpose. This has become increasingly problematic because councils are becoming ever more reliant on council tax for their budgets. In 2015/16, council tax made up 49.1% of core spending power. It now makes up 56.9% of core spending power in 2023/24. Councils are having to put up their council tax to provide much needed public services, which makes more and more residents vulnerable to falling into arrears.
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Government response AI summary
The government rejects the implied need for a revaluation of council tax bands, citing cost and potential negative impacts on lower-income households. It states a commitment to improving the local government finance landscape in the next Parliament, prioritizing stability in the current one.
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Ministry of Housing, Communities and Local Government
20
Conclusion
Second Report - Council Tax Collection
Rejected
In November 2022, the Secretary of State agreed there was a case for reforming council tax and said he had asked the previous Minister to look into it. Unfortunately, the previous and current Ministers have since cast doubt on the Department’s commitment to reviewing council tax.
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In November 2022, the Secretary of State agreed there was a case for reforming council tax and said he had asked the previous Minister to look into it. Unfortunately, the previous and current Ministers have since cast doubt on the Department’s commitment to reviewing council tax.
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Government response AI summary
The government rejects undertaking a revaluation of council tax bands, citing costs and potential negative impacts on residents, and states it is prioritizing stability in this Parliament while committing to improving the local government finance landscape in the next Parliament.
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Ministry of Housing, Communities and Local Government
21
Recommendation
Second Report - Council Tax Collection
Rejected
We stand by our previous conclusions, and those of our predecessor Committee: the council tax regime is in desperate need of reform and updating. We recommend that the Government reform council tax by undertaking a revaluation of properties and introducing additional council tax bands, and in the longer-term, consider options …
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We stand by our previous conclusions, and those of our predecessor Committee: the council tax regime is in desperate need of reform and updating. We recommend that the Government reform council tax by undertaking a revaluation of properties and introducing additional council tax bands, and in the longer-term, consider options for wider reform. (Paragraph 102) Council Tax Collection 39
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Government response AI summary
The government rejects the recommendation for council tax reform, specifically refusing property revaluation and additional bands due to cost and potential impact on low-income households, deferring wider reform considerations to the next Parliament.
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Ministry of Housing, Communities and Local Government