For the fifth year in a row, Cornwall Council – which is hundreds of millions of pounds in debt – has fallen short of its expected council tax income by almost £14 million, writes Local Democracy Reporter Lee Trewhela.

Accident Claims Advice sent a request under the Freedom of Information (FoI) Act to councils across England, Scotland and Wales to discover how much council tax has not been collected since 2019/20. Data gathered from Cornwall Council found that £13,806,485.58 was not collected in 2023/24.

The news comes as money saving expert Martin Lewis warned this week that council tax debt collection is “so aggressive it’d make banks blush”.

The 2023/24 data for Cornwall Council marks a five-year high in uncollected tax, while a 97 per cent collection rate is a drop on the previous two years. In 2022/23, 97.2 per cent of taxes were collected, leaving the council short by £12,047,071.34. It was a similar story in 2021/22, when residents were unable to pay £11,311,389.77 worth of council tax.

The Covid-impacted 2020/21 year saw the council record a 96.8 per cent collection rate, meaning £12,261,348.52 worth of tax was not paid.

Councils with social care duties can raise council tax by 4.99 per cent annually, including a two per rise just for cent social care precept, without triggering a referendum. Other councils are capped at 2.99 per cent, or must hold a referendum to go higher. Cornwall Council opted to raise taxes by the maximum 4.99 per cent for 2024/25. It means that a household could face a bill of up to £4,685.08.

What happens if you don't pay? 

Cornwall Council has taken steps to recoup unpaid tax, issuing 105,647 summonses in the past five years. Of the 23,875 summonses raised in 2023/24, 20,561 cases led to a liability order being granted. The number of liability orders is a five-year high, and double the 10,814 orders granted in 2020/21.

Just over 17,000 cases were sent to enforcement companies with the aim of capturing unpaid council tax.

Nationally, aggressive council tax debt collection practices – even after missing just one payment – are putting up to two million people at risk of serious harm, new research from charity the Money and Mental Health Policy Institute (MMHPI) has found. The charity’s chair and founder, Lewis, has called for Government action and urged local authorities to look at their methods in the meantime.

“Council tax collection practices are so aggressive they’d make the banks blush,” said Mr Lewis. “The grotesque process couldn’t have been designed better to accelerate distress for people in council tax debt, especially those with mental health problems. When someone misses a monthly payment, rather than asking ‘how can we help?’, many councils say ‘now you have to pay 12 times that’ – it’s like a caricature of the worst loan sharks.”

When a council tax bill is issued by Cornwall Council it provides information to the customer about when to pay and how much is due on each instalment; if a payment is not made by the due date reminders are sent. If payment is still not made then a final notice is sent at which point the ability to pay by instalments is lost and the total amount outstanding becomes due. Should payment still not be made a court summons is issued and the court will then grant a liability order.

A case is only referred to the bailiff as a last resort and only after the liability order has been granted at the magistrates’ court and either the debt has still not been paid in full or the customer has not made contact with the council to make an arrangement to pay or the customer has not adhered to an agreed payment plan.

What the council has said

A spokesperson for Cornwall Council said: “We understand the impact the current financial situation is having on people in Cornwall and are working with householders who are facing genuine difficulties in meeting their commitments. This includes offering flexible arrangements to allow people to pay off their council tax and business rate arrears by instalments.

“We would encourage anyone experiencing difficulties to contact us as soon as possible so we can discuss the options available to them. Legal action, including the use of enforcement agents, is always taken as a last resort.”
They added: “Whilst we make every effort to collect all council tax owed within the financial year, for the amounts quoted that aren’t collected in year we use all powers available to collect any outstanding payments. 

"The income received from council tax and business rates is used to help fund the services provided by the council, and so we do not write off arrears unless we are unable to collect for a specific reason, eg bankruptcy. This means we will continue to collect unpaid council tax and business rates beyond the end of the financial year, with results in overall collection rates of over 99 per cent.”

The council pointed out that it is well above the average when it comes to collecting tax – both as a whole for England and as a unitary authority.

AccidentClaimsAdvice.org.uk provides a dedicated advice service for people concerned about receiving a council tax summons. It runs a 24-hour free helpline and an online support feature which can be found on its website.