Councils facing severe financial challenges are increasingly using the threat of prison to intimidate vulnerable individuals struggling with council tax debts. This alarming trend is emerging despite the fact that actual enforcement of prison sentences for such debts is exceedingly rare, as recent statistics reveal.
Local authorities, grappling with the repercussions of years of austerity and the pressures of rising inflation, are in dire need of revenue. Council tax remains their primary source of income, and the government has permitted all councils to raise council tax by as much as 5% this coming April. Six councils are even allowed to impose increases of up to 10% as part of efforts to stave off financial collapse.
Meanwhile, data obtained by The i Paper indicates a troubling increase in the number of individuals being summoned to court for unpaid council tax, reflecting a growing number of people falling into debt.
Escalating Liability Orders
The number of liability orders—legal orders granted by magistrates for unpaid debts—requested by councils has surged by nearly 20% over the past four years, reaching approximately 5,300 per day. A liability order grants councils extensive powers to recover debts, including the ability to deploy bailiffs, garnish wages or benefits, force home sales, or, in extreme cases, imprison individuals.
However, the reality is that such court appearances seldom result in actual prison sentences. Campaigners argue that the threat of imprisonment is being utilized as a coercive tactic by councils to compel payment, even though enforcement is infrequent. According to Ministry of Justice statistics, only four individuals have been imprisoned for council tax debts since 2020, and the issuance of suspended prison sentences has plummeted from 395 in 2019 to just 19 in 2023. This decline is largely attributed to a landmark case involving Melanie Woolcock, who successfully contested her prison sentence for unpaid council tax in the High Court in 2018.
Phil Brickell, Labour MP for Bolton West, emphasized that the Ministry of Justice statistics highlight the obsolescence of the regulations allowing imprisonment for council tax non-payment. He stated, “The fact that residents in debt can be threatened with imprisonment by their local authorities or enforcement agents is, quite simply, outdated and must change.” He further urged that, given the rising council tax rates, it is crucial for financially struggling consumers to receive support from their local authorities and elected representatives.
A Personal Account of Fear and Uncertainty
Luke, a pseudonym for an individual who faced dire financial straits due to council tax debt, shared his harrowing experience before receiving assistance from the charity StepChange. “I was threatened by the council with the possibility of a prison sentence if I continued to fail to pay after the liability order was issued,” he recounted. “At that time, I couldn’t afford anything. After speaking to a senior recovery officer, I was advised to apply for a Debt Relief Order (DRO), which I did.”
After relocating, Luke was alarmed to learn that the council had applied again for a liability order without his knowledge. “I was once again warned that prison was a possibility if I failed to comply,” he explained. As a vulnerable disabled individual, the threat left him feeling terrified. Fortunately, the council eventually agreed to directly deduct payments from his benefits to settle the debt. “I am in a much better position now, and my DRO is set to conclude in April this year,” he added.
Debt charities and prominent figures, including Martin Lewis, have long advocated for reform in how council tax debts are managed, asserting that the urgency for change has intensified as tax rates increase and more individuals struggle to make payments. Areas in the North and Midlands, characterized by higher levels of deprivation, often see the highest levels of debt. For instance, in Salford, the council sought 54,060 debt orders last year, impacting one in five residents.
The Broader Implications of Debt Threats
Emily Whitford, a senior public policy advocate at StepChange, remarked, “While these new figures indicate that imprisonment for council tax non-payment is rarely enforced, the mere threat of such an outcome feels very real for those in arrears—especially among women and single parents.” She highlighted that the fear of imprisonment can lead to harmful consequences, including forcing individuals into unaffordable borrowing and negatively impacting mental health.
Whitford urged the Government to leverage the ongoing Sentencing Review to abolish the outdated and punitive regulations surrounding imprisonment for council tax non-payment, thereby providing individuals facing financial hardship with peace of mind. “This change would send a clear message that fairness is central to the Government’s agenda,” she stated.
The Government has announced a £69 billion settlement for councils for the fiscal year 2025-26, representing a 6.8% increase from the previous year. Additionally, a consultation regarding potential changes to council tax billing practices is expected to be released later this year.
A spokesperson for the Ministry for Housing, Communities and Local Government asserted, “It is the government’s clear expectation that councils should act proportionately and compassionately when collecting unpaid tax, with collection rates remaining high at 95.9%.” They emphasized that imprisonment should only be considered in the most serious cases and as a last resort.
In response, a representative from the Local Government Association stated, “Councils have a duty to their residents to collect taxes to ensure vital services—such as caring for the elderly and disabled, safeguarding children, waste collection, and road maintenance—are not compromised.” They expressed a desire for more efficient recovery methods that do not necessitate court involvement and support the removal of the requirement for the entire annual sum to become payable if a single installment is missed.
With rising numbers of individuals seeking council tax support, the spokesperson noted that without adequate funding for this assistance, it is inevitable that bills will continue to escalate for those least able to afford them. They urged anyone struggling with council tax payments to reach out to their local authority for financial guidance and support as soon as possible.
