Revenues and Benefits Discussion Group 7 July 2024
At the latest meeting of the Independent Revenues & Benefits (R&B) Group, members grappled with a familiar but still unresolved dilemma: how to reconcile the administrative and political pressures of council tax collection with the realities of household poverty, affordability, and fairness.
Council Tax Write-Offs and Public Perception
Malcolm Gardner opened the discussion with the case of Leeds City Council’s £655,000 council tax write-off, prompting a lively debate about public reaction, timing, and financial significance. Thomas Clark noted that such debts are typically provisioned for over a decade, making the write-off financially neutral but reputationally sensitive. Michael Fisher added that in some authorities, monthly write-offs can reach £350,000, particularly when dealing with insolvency cases.
However, as Bob Wagstaff pointed out, councils are caught in a bind—criticised for both writing off debt and for letting arrears mount. “If you do it little and often, no one notices,” he said, highlighting the inconsistencies in public reaction and media scrutiny.
Council Tax Support Schemes Under the Microscope
Discussion turned to Harrow’s £90 million in council tax arrears—the highest in London. Clark questioned whether harsher Council Tax Support (CTS) schemes might be a contributing factor. Rachel Walker agreed, noting a correlation between tougher schemes and higher arrears: “In most places, council tax is keeping the lights on… It’s a vicious cycle.” She also observed that many households simply disengage, knowing that deductions from Universal Credit mean they’ll never repay in full.
Alex Clegg reinforced this, arguing that council tax remains a regressive and problematic debt. “We’re asking people to pay what they don’t have,” he said, noting that for councils with 50% schemes like Harrow, some arrears may have been avoidable with a more generous design.
Policy Disconnect and Government Blind Spots
Paul Howarth questioned whether Whitehall departments truly understood the interrelationship between policy and collection. He argued that deprivation and the design of CTS schemes are among the clearest predictors of arrears. Gareth Morgan noted that Wales has retained 100% rebate schemes and largely avoided England’s collection challenges.
From a local government perspective, Naomi Armstrong stressed the need for Section 151 officers to better understand how local schemes impact arrears and write-offs, especially when collecting small debts from households in hardship.
Thomas Clark made a strong call for proactive communication: “We’ve all got a voice. It’s not difficult to get hold of people and get them to listen—when you show them the numbers.”
Growing Concern Over Rent Arrears
The group also discussed rent arrears, which Malcolm Gardner suggested had overtaken council tax as the more serious crisis. Rachel Walker confirmed that rent arrears were the “cousins” of council tax debt—part of the same systemic failure. Clark highlighted how policy decisions—such as reclassifying housing licences to charge market rents—had unintentionally triggered massive arrears, especially in London.
Family Hubs: A Return to Integrated Services?
Turning to central government plans for 1,000 “Family Hubs” by 2028, Rachel Walker welcomed the idea in principle but flagged that £500,000 per site was a modest investment. Naomi Armstrong noted the timing would be awkward for areas undergoing local government reorganisation, while Gareth Morgan raised concerns over the sector’s capacity to staff such initiatives given an ageing workforce.
Michael Fisher echoed this, suggesting that the sector would again need to “grow its own” talent as it had in the original era of one-stop shops.
Modelling, Design, and Political Trade-offs
In the final section of the discussion, the group reflected on how schemes are designed. Gareth Morgan questioned whether councils really model affordability and non-payment rates. Gardner and Howarth noted that more engaged councils do—particularly when working with consultancies like Visionary.
Michael Fisher shared a case where a council moved from a fully funded scheme to one requiring a minimum payment from all working-age claimants—adding 10,000 new payers. The change was introduced over a year with early member engagement but assumed low collection rates from the outset.
Alex Clegg and others emphasised that political pressure to deliver savings often limits progressive design: the only way to meet financial targets may be to charge the most vulnerable. However, as Alex noted, some councils have offset this by making schemes more generous at the bottom end—even when cutting overall.
Conclusion: Policy, Practice, and People
The group closed with a reminder from Tom that bad debt provisioning can wipe out supposed savings from tougher schemes, making the case for deeper, joined-up analysis. Naomi was in agreement before her connection dropped, leaving others to summarise the key takeaway: that council tax design isn’t just a technical matter—it’s a frontline policy with real human and fiscal consequences.
The Independent Revenues & Benefits Discussion Group continues to provide a vital forum for expert analysis, shared learning, and open debate at a time of significant policy flux. For more information or to join future sessions, contact Malcolm Gardner at Visionary Network. info@visionarynetwork.co.uk
Recording can be found here
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