Councils across England and Wales have been chosen to pilot a scheme that will help local authorities recover unpaid council tax - currently costing local authorities tens of millions of pounds every year.
Salford City Council and Manchester City Council are part of a group of 29 local authorities asked to be part of the trial working with the Department of Work and Pensions (DWP) and Revenue and Customs (HMRC) to be the first to use powers introduced by the Digital Economy Act (2017).
Through the trial, non-paying customers who are employed or have an income will be contacted to start paying their debts, or they will have their debt deducted directly from their earnings through their employer - should they be in a financial position to do so.
This is an Attachment of Earnings and is commonly used to recover debt. However, if a person fails to or refuses to supply their employment details, councils have been unable to recover unpaid council tax using this method.
The Act allows councils to obtain employer and income information from HMRC for people who have failed to pay their council tax and have an order to pay by the local magistrates court.
The pilot scheme allows councils to work with HMRC to share employment information that will allow councils to recover millions of pounds per year in unpaid council tax, which could otherwise be used to improve services to residents.
Councils are already working closely with national debt advice charities to support vulnerable residents who are struggling with debt.
If a person is found to be unemployed or does not hit a low income threshold, their debt will not be taken from them automatically.
Anybody who finds themselves in a position where they cannot pay their council tax should contact the local authority immediately to discuss their situation.
The pilot will last one year before being reviewed, after which a decision will be made whether to roll the programme out to all councils in England and Wales.
To provide transparency about what data is being shared, each pilot is registered on GOV.UK.
Councillor Bill Hinds, Salford City Council's lead member for finance and support services, said:
“This one year trial is another method of ensuring that councils get the funds they need to pay for vital services.
“We’ve already seen our council tax recovery increase this year up to 92.17% for council tax.
“Anyone who needs debt advice as part of this scheme will be offered it; we have launched Better Off coffee and chat sessions to help people who are struggling to pay their council tax in any circumstances and always encourage anyone in that position to speak to us as soon as possible.
“But those who can afford to pay but don’t will face a crack down. It’s only fair that they pay for the services they benefit from, along with the thousands of people who pay regularly each and every month.”
Councillor Carl Ollerheard, Manchester City Council’s executive member for finance and human resources, said:
“The vast majority of Manchester people pay their council tax every month that helps to pay for vital services and to support some of the city’s most vulnerable people.
“It is wholly unfair that there is a minority of people in the city who benefit from but refuse to contribute to the collective pot at a time when local authorities are relying more and more heavily on council tax to deliver vital services - and it is costing the city more than £10 million per year.
“We will continue to support those people who are struggling to make ends meet with help from our colleagues in the city’s debt advice charities, but it’s time for those who are avoiding council tax to play their part and we hope this pilot gives us the power to hold these people to account.”