The latest Monday Independent Revenues and Benefits Discussion Group opened in familiar style, with Malcolm Gardner easing the group into the session through light conversation about the recent heatwave and the programme of conferences ahead. Visionary Network, he reminded colleagues, was “on tour” during the year, with recent attendance at the LACEF conference and further appearances planned at Public Finance, Ascendant by the Sea, IRRV and Wales.
But beneath the humour and informal introductions, the session quickly moved into two serious themes: the quality of council data as authorities prepare for major redesign and local government reorganisation, and the increasingly alarming position on council tax arrears.
Data cleansing before redesign
Manu opened the first substantive discussion by explaining work being carried out with Malcolm Gardner and Rachael Walker on council tax reduction modelling. The work relies on existing CTR caseload data, but before any modelling can be trusted, the data itself has to be tested and cleaned.
He described a range of issues found in caseloads: negative values in capital fields, mismatches in the number of dependants recorded in different parts of the data, cases recorded as CTR cases where no council tax reduction was present, and calculations that did not match the underlying inputs. In one example, around 22% of cases had data issues. For Manu, the key point was that data accuracy is not a technical afterthought; it is the foundation for any meaningful analytics or policy modelling.
Malcolm Gardner picked up the wider significance. Drawing on his long experience of working with data, he argued that data cleansing is one of those tasks that should be completed before a major project begins, not after problems emerge mid-project. He also saw clear links to Housing Benefit subsidy risk: if errors can be identified early, councils can reduce downstream financial and compliance problems.
Ian Savigar agreed and gave a practical example from Reading, where the authority is looking at modelling a new council tax reduction scheme. He explained that because the current scheme has not been heavily affected by Universal Credit uprating, the UC award values held in the system are not always correct. That becomes a major issue when the authority starts modelling a scheme that relies on those income figures. For Ian, the process of redesign itself often reveals the underlying data problems that must be solved first.
Robert Fox offered a useful note of caution. Some issues, such as missing postcodes, should normally be picked up through standard annual billing checks. Other categories, such as claims with no liability or no reduction, may be more about housekeeping than true data error. He suggested that some councils may simply not be cancelling nil entitlement cases. With a touch of cynicism, he added that some may even retain such cases because a larger caseload can help justify staffing levels.
Manu accepted the point but explained that the report also serves another purpose: transparency. If a council supplies 30,000 cases and only 7,000 are included in the modelling, the council needs to see clearly which cases have been removed and why. The report, therefore, is not just about identifying errors; it is about giving councils visibility over the modelling base.
Gareth Morgan widened the discussion by distinguishing between data that is wrong and data that was once correct but has become out of date. He argued that data cleansing should also be seen as an opportunity to validate records and update them where circumstances may have changed. Malcolm agreed, reframing the point as not simply correcting data but validating whether it is still current and reliable.
Sean O’Sullivan then highlighted how system configuration can create problems. He suggested that some “no council tax liability” cases may result from changes of address, exemptions or other council tax changes not forcing a recalculation on the benefit side. In some outsourced arrangements, he said, the council tax and benefit systems may not be fully aligned, particularly where one service is retained in-house and the other is delivered externally.
Rachael Walker briefly intervened from a policy perspective, joking that systems were not her territory, although Malcolm observed that policy decisions can often have unintended consequences for how data is held, interpreted and maintained.
Jon Gibbs raised questions from a systems viewpoint. He was surprised by some of the errors described, particularly where council tax reduction exceeded liability or where negative monetary values appeared. In his experience, systems such as Civica would normally prevent or report such issues. That led Sean O’Sullivan to suggest that some errors may have arisen through data imports rather than manual input.
Tom Clark, from Liverpool, said he recognised the type of system likely to be involved from the nature of the errors. He agreed that no system will ever produce perfect data, even with DWP matching and daily internal reconciliation reports. However, he saw clear value in automated cleansing, especially for councils going through local government reorganisation. Before attempting to “redesign the world”, he said, councils should understand and clean the data they already hold.
Manu closed the item by emphasising the practical benefit of automation. Councils may already carry out manual cleansing, but it can take months. Automated testing will not remove the need for professional judgement or manual checks altogether, but it can significantly reduce the number of unresolved errors and help councils focus their effort where it matters most.
Council tax arrears: an unsustainable position
The meeting then turned to council tax collection and arrears, introduced by Rachael Walker. She had shared national statistics following the release of MHCLG figures on council tax arrears and was also working on a report with Debt Justice.
Her message was stark: council tax debt is rising far faster than council tax liability. Looking at data since 2005, she said arrears had increased by around 292%, while liability had increased by around 95%. In England alone, council tax debt now stood at about £7.4 billion. For Rachael, this was not simply a sign that council tax is becoming unaffordable; it is evidence that it has become “unsustainably unaffordable”.
She linked the widening gap particularly to the period after 2013, when localised council tax reduction schemes were introduced for working-age households. She also pointed to the adult social care precept, austerity, pandemic disruption and continuing pressures on household finances. The pandemic, she noted, did not interrupt the long-term pattern. Debt continued to grow.
Rachael argued that the position cannot be solved by councils alone. Enforcement agents cannot resolve it, and better collection practice will not be enough. The problem is strongly linked to poverty, deprivation, local scheme design and the wider structure of local government finance. She warned that if the trend of the last decade continued, council tax debt could rise dramatically over the next ten years, with as many as one in four households affected.
For Gareth Morgan, the data pointed to a tipping point that may already have been passed. He suggested that the temporary pandemic protections, including the £20 Universal Credit uplift, had shown that when people had a little more money, bills became more affordable. In his view, the widening gap since 2010 reflected the wider effects of welfare reform and austerity. He was doubtful that system redesign alone could solve a problem of this scale; an immediate answer was needed.
Tom Clark then defended councils against any simplistic interpretation of the figures. He accepted Rachael’s overall analysis but pointed to major operational pressures. Courts are not giving councils enough time to process liability order applications at the pace required. Many councils paused collection during the pandemic and are still trying to catch up. Valuation Office delays can result in backdated bills arriving many months later, creating further arrears that residents cannot realistically clear quickly. For Tom, the national picture is made worse by operational bottlenecks across several public bodies.
Michael Fisher added a different but uncomfortable perspective. He said some councils have deliberately made council tax reduction schemes less generous, knowing that the extra amounts may never be collected, because doing so can temporarily boost the tax base and help with short-term budget pressures. He described that as shocking because it places the consequences on residents.
Michael also raised the question of household priorities. From his work looking at income and expenditure, he sees cases where council tax is treated as less important than other outgoings. He accepted that broadband and mobile phones are now essential in many households, particularly for education and daily life, but argued that social tariffs and cheaper options are often not being used. For him, there is a role for councils in referring people to proper debt advice and helping households reduce expenditure as well as maximise income.
Rachael disagreed with the idea that the arrears crisis is primarily about poor household choices. She argued that the main causes are policy failure, poverty, underfunding and the wider cost of living crisis. She also warned that forthcoming changes to recovery processes could make in-year collection harder by pushing final notices later in the cycle, shortening the time available to recover debts and increasing the risk that higher repayment arrangements will fail.
Malcolm Gardner sought to bridge the two positions. He suggested that Rachael and Michael were both describing parts of the same journey. People on higher incomes than would previously have been affected are now being pulled into financial difficulty. They may have made spending commitments on the assumption that they would never be in that position. When circumstances change, they face a sudden and difficult adjustment. Those who have lived with long-term poverty may, in some cases, be more used to managing scarcity, although Malcolm was clear that this did not make them better off.
Kevin Stewart then reflected on local authority practice. He said councils have historically focused heavily on in-year collection, sometimes at the expense of older arrears. Many have been reluctant to write off historic debt, even where there is no liability order and no realistic prospect of recovery. He expressed sympathy for officers who are doing difficult work with limited resources and sometimes limited political support. In his view, councils will need to become more innovative, but many do not currently have the capacity to tackle arrears properly.
Julie Smethurst brought the discussion back to the lived experience of residents and staff. She said comfortable households are now struggling more visibly, and that every trip to the supermarket shows how much everyday costs have risen. She objected to the way criticism often falls on local government while private utilities, broadband providers and other companies continue to command payment priority because of the impact on credit ratings. Julie argued that the public sector needs to change the narrative: council tax pays for essential local services, and if it is not paid, those services suffer.
At the same time, Julie was clear that councils should not keep asking people to pay what they cannot afford. She strongly supported a return to a national council tax reduction scheme, arguing that current arrangements are draining people dry and cannot continue indefinitely.
Robert Fox linked the issue to the Crisis and Resilience Fund. He suggested that the shift towards prevention and resilience will require councils to have difficult conversations with households that have not previously experienced financial crisis. The challenge, he said, is that councils are tax collectors, not personal budgeting advisers, yet increasingly they are being drawn into conversations about household decision-making and affordability.
Sean O’Sullivan made a forceful point about collection performance. Councils often regard 98% or 99% in-year collection as good, but if arrears are building by 1% or 2% each year, the overall debt position is still worsening. Unless councils collect more than 100% by recovering arrears as well as current-year liability, they are not reducing the backlog.
Sean also criticised the accounting framework. Once a council tax bill is raised, it counts as income. If it is later written off, the council has to absorb that loss. That, he argued, creates a perverse incentive and makes meaningful reform harder. He also returned to the point that council tax reduction is often treated as an easy budget cut when, in reality, asking people on very low incomes to pay unaffordable amounts produces debt rather than income.
Welfare reform, Sean said, sits behind much of the problem. Local Housing Allowance restrictions, wider benefit cuts and freezes continue to push people into impossible choices. If someone must choose between paying rent and keeping a roof over their head or paying council tax, the rent will take priority.
In the closing comments, Julie underlined the emotional pressure on staff. These are no longer occasional difficult conversations; they are happening on almost every call. Staff are being asked to tell people to pay when they know those residents cannot pay. She also cautioned that the Crisis and Resilience Fund will not be a panacea unless it is designed and administered in the right place.
Paul Howarth had the final substantive contribution. He pointed to research showing a strong relationship between council tax arrears, deprivation and the generosity of council tax reduction schemes. For him, the cost-of-living crisis, housing pressures and the failure of Local Housing Allowance policy all sit at the heart of the issue. There are many factors, he said, but the economic climate makes any solution extremely difficult.
Malcolm Gardner closed the discussion by observing that many of these problems have long roots. The direction of travel could have been identified much earlier if there had been the political will to do so. Instead, local government is now dealing with the consequences of policy decisions made over many years. He compared it to the climate crisis: the warning signs were visible long before the system reached the point of emergency.
The meeting ended with Malcolm joking that perhaps the group would find a more cheerful subject the following week, possibly Wales. But the underlying message was clear. Whether the subject is data quality, council tax reduction, arrears, welfare reform or local government finance, the sector is facing problems that cannot be solved by technical fixes alone. Better data matters. Better systems matter. Better collection practice matters. But the group’s discussion pointed to something larger: without serious national reform, councils will continue to be asked to collect money that many residents simply do not have.
The Recording can be found here