Curb councils’ use of ‘aggressive’ debt collectors, Chancellor told

THE USE of “heavy-handed” bailiffs by councils needs to be curbed, a cross-party group of MPs and peers has told the Chancellor.

They have written to Rishi Sunak, inset, calling for a Debt Management Bill to end “aggressive” practices in the public sector which they said are wasteful and punitive.

The move comes amid fears that the coronavirus crisis is driving more people into debt.

The message is backed by the Centre for Social Justice (CSJ) think-tank, which says the pandemic has “sparked a massive rise in council tax arrears and 3.1 million claims for universal credit”.

In a joint letter, Tory former Cabinet Ministers Baroness Morgan

and Sir Iain Duncan Smith join forces with ex-Liberal Democrat leader Tim Farron and 30 other parliamentarians to call for change.

They say the “growing tendency for councils to rely on bailiffs to collect tax arrears is an unfair approach” and represents “poor value for money for the taxpayer, causing immense stress and anxiety in the process”.

The MPs and peers say that aggressive debt collection practices have been “widely abandoned” in the commercial sector in the past decade because they are costly and ineffective.

The letter states that council debt collection is an area in particular need of modernisation. It says: “We are concerned about the regulations governing council debt collection which mean that, on missing one payment, households can become liable for the whole year’s council tax bill.

“While a small number of councils have introduced fairer debt collection techniques in recent years, many remain reliant on the use of heavy-handed enforcement.”

The letter highlighted that councils passed 2.6m debts to bailiffs in 2018-19, even though bailiffs only recovered 27p of every £1 referred.

The MPs note council tax enforcement has been temporarily paused throughout lockdown but is set to restart in July.

They have called for new laws to bring in “fairness principles” in public debt collection, removing the sanction of imprisonment for council tax debt and introducing an independent bailiff regulator.