In five years, the Council tax debt mountain in Scotland has doubled as concerns rise that the coronavirus pandemic will intensify a credit crisis.
Official figures show that in March 2020, the amount of council tax remaining in 2019/20 was £ 108 million. The debt was already £59.743 million in 2015/16.
The sum actually unpaid in Scotland’s council tax, which has contributed to the persecution of tens of thousands of families, is adequate to pay for almost four NHS Nightingale Hospitals.
To fill a £ 500 million black hole in local government revenue, Scots face major tax rises.
Citizens Advice Scotland (CAS) has warned of a “explosion” in council tax debt, finding that the number one debt concern that the network sees is council tax debt.
It says it would like to see more assistance for those who have fallen into debt, which could be through Citizens Advice Scotland, which could be dedicated to paying the expense of writing off such debts or creating a Council Tax Hardship Fund through the Scottish government.
Examination of CAS figures for 2019/20 reveals that 2,257 individuals with a complicated issue of council tax debt sought assistance from the network of Citizens Advice and owed a total of £ 6.8 million in council tax arrears.
When someone has several debts, a complicated debt issue is
Worryingly, the average debt is over £ 3,000 – almost three times the £ 1,201 average council tax bill.
As payment holidays and exemptions are phased out, the charity is worried that council tax debt will increase even more in 2021.
This will push more individuals to lower incomes and put intense pressure on the decisions of households about which bills to pay, especially council tax.
Scots are facing massive tax hikes to fill a deficit of £ 500m.
CAS urges people to take advantage of the Council Tax Reduction Scheme of the Scottish Government, which will help minimize potential payments. It can provide backdating of up to six months for certain individuals, too.
Scotland is potentially facing an explosion in Council Tax Debt in 2021, said Myles Fitt, CAS spokesperson for financial health.
Poor enough are the pre-pandemic estimates, but the real concern is that Covid-19 is going to make it even worse.
Councils around Scotland were very compassionate to those in difficulty with council tax payments and the payment breaks were very welcome in the first six months of the pandemic. This has, however, contributed to the building of arrears, arrears that would be difficult to pay for the many people who have suffered a decline in income over this time due to unemployment or decreased working hours.
For some, this issue will not occur until 2021, when economic strains on personal finances will be felt, as the holiday scheme and payment support measures will come to an end at the end of April, ironically the same month as the first tax payments to the Council are due in the new fiscal year.
“Action is needed to prevent council tax debt – already the number one debt problem seen by the Citizens Advice network – from becoming an even bigger problem next year.”
Aberdeen City Council is the council with the highest issues with council tax collection, according to official estimates, failing to raise 6.4 percent of the sums due, followed by East Ayrshire and North Ayrshire (6 percent), North Lanarkshire (5.9 percent), Dundee City (5.8 percent) and Glasgow City (5.6 percent ).
Stirling, which did not collect 2.2 percent of the invoiced council tax, is the local authority with the best collection record, followed by Orkney (2.3 percent), East Renfrewshire (2.5 percent), Angus (2.6 percent) and Perth and Kinross and Shetland (2.9 percent ). In September, the Scottish Local Authorities Convention (COSLA) demanded the abolition of the three percent limit on the rate of council tax that councils can set.
It said that, as authorities warn of “devastating” financial gaps, £ 500 million in extra funding will be required to help Scottish councils cope.
The demands were part of a recent paper on the Blueprint for Local Government in which