Londoners owe £1.4 billion in unpaid council tax – up 11 per cent in a year – in what experts said was another dramatic indication of the cost-of-living crisis.
Boroughs such as Brent (£92.2m), Croydon (£90.8m) and Hackney (£79.6m) have some of the biggest council tax debt arrears in the country.
The figures emerged only days after Government documents released as part of Chancellor Rachel Reeves’ comprehensive spending review indicated that borough bills were expected to rise by five per cent a year over the coming years.
A total of 22 of the 33 London boroughs already send out bills in excess of £2,000 a year.
There are also concerns that the amount Londoners pay to the mayor to help fund the Metropolitan police will also be hiked, due to a gap between Government funding and how much Scotland Yard is seeking.
According to the Ministry for Housing, Communities and Local Government, the amount owed to councils across England now stands at £6.6 billion, with 1.8m residents in arrears.
In the capital, council tax arrears increased by £137.5m in the last year, taking the total owed to town halls to £1.4bn.
Brent, Croydon, Hackney, Lewisham and Southwark all feature in the national top 10 of council tax debts.
Excluding the City of London, which has far fewer residents, Kingston had the lowest arrears in the capital (£10.8m), despite setting the most expensive bills in London.
National Debtline, the free independent debt advice service, advises residents worried about council tax bills to seek advice as soon as possible.
One in four callers to the helpline have council tax debt, averaging almost £2,000 per person.
All councils offer discount schemes to lowest income residents.
Councils have become increasingly reliant on council tax revenue to fund social care, schools and rubbish collections.
This has also led to higher bills, creating a vicious cycle for many people already struggling to pay.
Recent Money Advice Trust research found that 390,000 Londoners were behind on their council tax bills in March, suggesting that many people could be struggling with council tax arrears.
Steve Vaid, chief executive at Money Advice Trust, the charity that runs National Debtline, says, “Unless changes are made at a policy level, arrears are likely to keep climbing.
“At National Debtline, we’re calling for improved collection practices, as well as greater investment in council tax support schemes, to prevent people falling behind in the first place.”
Current rules mean that households can become liable for their full annual council tax bill if they miss one payment, which often results in a quick escalation to bailiff action.
The Government plans to extend this period, so that people have more time to seek support.
In addition, the Ministry of Justice has announced plans to consult on giving independent body the Enforcement Conduct Board legal powers to regulate the bailiff industry, with millions of council tax debts passed to bailiffs every year.
Mr Vaid said: “Arrears levels of this magnitude underline the need for urgent action across London.
“Every day at National Debtline, we see how council tax continues to be one of the most common debts people face.
“Councils have a vital role in helping residents with unmanageable bills and to ensure council tax – crucial to funding local services – is collected in a way that is fair and affordable.”
Research by the Centre for Social Justice found that many people with council tax debts struggled to pay for a number of reasons.
Matthew Greenwood, head of debt at the Centre for Social Justice, said: “With local government on its knees and council tax arrears at record highs, people who don’t pay their council tax even though they have the money should face the full force of the law.
“But our report shows that the vast majority of those in arrears are not refusing to pay – they’re simply unable to, often due to poor health, job loss or other negative life shocks.
“Under the current rules, missing just one payment can make someone liable for the entire year’s bill within weeks, triggering bailiff action and, in some cases, threat of imprisonment. It’s an outdated, punitive system that fails to distinguish between those who won’t pay and those who genuinely can’t.
“The Government must now deliver on its pledge to end the unfairness in council tax collection and help put millions on a path to repaying their bills.”
Contact National Debtline for free on 0808 808 4000 or via www.nationaldebtline.org.
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