Source · Select Committees · Housing, Communities and Local Government Committee
Recommendation 16
16
Rejected
Paragraph: 86
Central government lacks crucial understanding of national council tax arrears drivers and causes.
Conclusion
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.
Government Response 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.
Paragraph Reference:
86
Government Response
Rejected
HM Government
Rejected
Local council tax support (LCTS) was put in place from 1 April 2013 to ensure that those in financial need are assisted with their council tax bill. Pension age LCTS schemes are made according to the terms of a centrally defined scheme set out in regulations. Reflecting the fact that pensioners are more likely to have fixed incomes and not work, this scheme provides reductions of up to 100% for those on the lowest incomes and is broadly equivalent to the former council tax benefit system. Working age LCTS schemes are designed and administered by local authorities. As such the schemes take a wide variety of forms specifically tailored to meet local circumstances and do not lend themselves to making like-for-like comparisons. Council tax arrears arise as a result of a number of factors including the size of the council tax bill (which comprises of charges set by a number of authorities in the taxpayers’ area), the circumstances of individual taxpayers, and local economic and cost of living-related matters. This range of factors makes it challenging to assess the underlying causes of arrears in different areas on a like-for-like basis. Given the wide variety of council tax reduction schemes in place and the multi-faceted nature of council tax arrears, the Government does not believe that the suggested formal research would yield results that could usefully identify a link between LCTS and arrears. The Government believes that councils are best placed to make judgements on how to best administer the collection of council tax, using their local knowledge. The Government has no plans to collect data on methods of engagement with debtors, collection methods, repayment plans set up and reasons for arrears, which would add additional burdens on councils.