Bailiff’s came knocking for 2.1 million UK council debts last year

Overall bailiff use by local authorities has increased by 16% in the last two years, with councils referring 2.1 million debts to bailiffs in the last year, according to research released on Thursday by the Money advice Trust.

Authorised and regulated by the UK’s Financial Conduct Authority, the Money advice Trust is a charity that has run the telephone based advice service National Debtline since 2003.

Money Advice Trust’s research, titled Stop The Knock, is based on Freedom of Information requests to local authorities.  The research indicates that councils are prepared to instruct private bailiffs to recover debt from residents and businesses that are in financial difficulty, despite the serious negative impact this can have. It also found that local authorities that use bailiffs the most were also found to have had less success, on average, in collecting council tax arrears.

Stop The Knock figures show that bailiffs, now legally known as ‘enforcement agents’, were asked to retrieve council tax debts 1.27 million times during 2014/15. During the same period, parking-related debts were passed to enforcement agents on 715,000 occasions and 40,000 Housing Benefit overpayments were referred to bailiffs. Private bailiffs were also asked to collect 85,000 unpaid business rate debts and 2,700 commercial rent arrears, along with 32,000 sundry/other debts owed by individuals and businesses.

Despite repeated calls for councils to improve their debt collection practices, a total of 2.14 million bailiff referrals were reported for 2014/15, 16% higher than the figure of 1.84 million figure recorded by the Money Advice Trust in 2013.

Council Tax arrears were found to account for the majority of bailiff services used by local authorities. It is reportedly is one of the fastest growing debt types that the National Debtline helps people to resolve. The Stop The Knock research showed that 24% of callers to National Debtline were in arrears in 2014, up from just 14% in 2007.

The research also discovered variations across the country in the way council debt was dealt with by local authorities, with bailiff use ranging from the equivalent of more than a third of properties in some areas, to less than one in 100 in others. The London Borough of Barking & Dagenham made the heaviest use of bailiffs relative to its size, having called enforcement agents in on 34,041 occasions during 2014/15, which equates to 43% of properties in the area. Other boroughs in London were also in the top 10, with Hart District Council and Hyndburn Borough Council the highest ranked non-London councils in second and fourth place at 39% and 30% of properties respectively.

However, nineteen local authorities were recorded as using bailiff services for less than 1% of properties in their areas and just three councils, Charnwood, Wyre and the Isles of Scilly, did not use bailiffs at any time during 2014/15.

Chief executive of the Money Advice Trust, Joanna Elson OBE, commented: “Two years ago our original research on local authority bailiff use led to widespread calls for councils to improve their debt collection practices. We had hoped the situation would have improved since then. Instead, more than half of councils are using bailiffs even more than before to collect unpaid debts.

“Something is seriously wrong here. On the front line of debt advice we know that sending the bailiffs in can deepen debt problems, rather than solve them – and it can also have a severe impact on the wellbeing of people who are often already in a vulnerable situation.”

She added “Bailiff action is not only harmful to those in arrears – it is also a poor deal for the council taxpayer. Our research shows that those local authorities that use bailiffs the most are actually less successful, on average, at collecting council tax arrears. This is a lose-lose situation.

“Local authorities are facing significant funding pressures – and they of course have a duty to collect what they are owed. In the case of council tax, this is particularly crucial in ensuring proper funding for the local services we all rely on. Too many councils, however, are far too quick to escalate to bailiff action when better preventive work, earlier detection and support for people who fall behind are far better options for all concerned.

“Our message is clear – bailiffs should only be used as an absolute last resort, and the earlier residents and business owners who are struggling can be signposted to free sources of advice such as National Debtline and Business Debtline, the better.”