Councils fail to collect £2.7 billion Council Tax

A huge £2.7 billion in Council Tax remains unpaid, since its introduction in 1993.

Councils have failed to collect £2.7 billion of Council Tax, according to new figures from the Department for Communities & Local Government (DCLG).

This is an ongoing cumulative total of Council Tax owed, dating right back to when it was introduced in 1993 up until 31st March 2015.

During 2014/15 councils collected £570 million of outstanding Council Tax arrears, but wrote off around £191 million as “uncollectable”.

Overall collection rates were 97% in 2014/15, the same as in 2013/14.

The worst performers

You can see the collection rates for each of the local authorities in England using table six on this section of the Gov.uk website to compare how your local council performs.

But I’ve picked out the local authorities with the worst collection rates in the table below.

Local authority	Percentage of Council Tax collected 2014/15	Percentage of Council Tax collected 2013/14
Salford	91.6%	92.2%
Manchester	91.8%	91.7%
Blackpool	92.4%	93.1%
Nottingham	92.5%	93.2%
Oldham	93.1%	93.8%
Rochdale	93.5%	93.0%
Middlesbrough	93.6%	93.4%
Derby	93.6%	93.3%
Greenwich	93.6%	93.1%
Kingston upon Hull	93.6%	94.2%
Doncaster	93.9%	93.8%
Newham	94.0%	92.5%
Hackney	94.0%	93.6%
Sheffield	94.0%	93.7%
Tameside	94.0%	94.2%
Bradford	94.2%	94.3%
Barking and Dagenham	94.3%	94.1%
Lewisham	94.3%	94.1%
Wakefield	94.4%	94.4%
Portsmouth	94.5%	94.0%
Birmingham	94.6%	95.3%
Preston	94.6%	94.6%
Liverpool	94.7%	94.6%
Hyndburn	94.7%	94.4%
Peterborough	94.8%	95.3%
Southampton	94.9%	95.1%
Leicester	94.9%	94.8%

Salford council had the worst collection rates compared to the rest of England. The 8.4% that remains unpaid (dating back to the introduction of Council Tax) is worth £7.8 million.

Neighbouring Manchester is no better, responsible for a shortfall of a whopping £12.3 million, while Blackpool accounts for £4.3 million.

Council Tax debts

Citizens Advice and the StepChange Debt Charity have both reported significant jumps in the number of people struggling with Council Tax debt this year. According to Citizens Advice, it is now the most common problem it sees - it reckons it will deal with 191,400 Council Tax debt issues this year, a 20% increase.

This could be to do with the changes to Council Tax benefit in 2013 (which saw it replaced with a localised Council Tax support), which meant that more than two million low-income families have had to pay an average of nearly £140 more Council Tax a year.

Council Tax arrears are classed as a priority debt, so not paying can lead to significant problems. Your local authority can apply to take the money you owe from your benefits or wages, bailiffs can be sent to your home or you could even be sent to prison.

More on tax:

Tax and benefit changes 2015/16

The towns that pay the most Income Tax

Where Council Tax is rising and falling in 2015/16