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Alarm Bells Ring: Citizens Advice Warns of £19bn of Household Debt

As living costs rise and wages remain stagnant, private debt is frequently mentioned, and yet, not often do we hear about what actually happens to those who are drowning in it. Enforcement agents, or bailiffs, are employed by agencies, even local councils, to settle these unpaid debts, by taking from those who already can't afford to pay in the first place. 

Bailiff use can have unintended consequences. It can be a frightening and humiliating experience which can cause acute stress and anxiety for families, sending vulnerable people to spiral into further debt. It is a common occurrence that many will be pressured into settling debts for council tax at the expense of paying other essential bills such as rent, to only then face the possibility of eviction and temporary accommodation. 

A stark reminder of the consequences of bailiff use came to light when Jerome Rogers, just 20 years old, took his own life the day bailiffs came to visit. Jerome worked as a courier, shipping blood and medical supplies between hospitals. He received two £65 parking offence fines which quickly snowballed to over £1,024. Missed deadlines and admin fees increased the fine over 300%. Then the debt was outsourced to a private bailiff company, automatically adding a £75 admin fee plus another £235 ‘attendance fee.’ The bailiffs came and wrongfully took away Jerome’s motorbike - his livelihood, and his sole means of earning money to be able to pay off the debt. That day, Jerome ended his life. 

Jerome is not alone: new research reveals that more than 100,000 people a year in England who are mired in heavy debt try to end their lives.  In 2017/18 Citizens Advice helped people resolve 98,000 bailiff issues, a figure which has grown by more than 25% since 2014, despite reforms which sought to ‘stamp out bad practice’ in the bailiff industry in that year. Since 2014, we’ve seen 66,000 issues relating to bailiffs refusing offers of payment, and 52,000 issues with bailiffs visiting or entering properties inappropriately.

Figures uncovered from the Stop the Knock report show that council tax arrears account for 1.38 million debt referrals. Much of which can be attributed to the replacement of Council Tax Benefit with Local Council Tax Support schemes, which means many more residents on low incomes have to pay council tax for the first time. Another 810,000 debts are parking fines, and 50,000 are for housing benefit overpayments. 

Although local authorities are under huge financial pressure to provide the most basic services, and collecting debts for council tax are essential in funding the services that we all rely on, it is their duty not to punish individuals for unpaid bills but to protect their residents from spiralling into debt. 
Heavy-handed debt collection in the public sector is counter-productive: court action, bailiffs and lawyers, supporting families in temporary accommodation all cost money and can create high levels of stress and anxiety in families that find themselves in debt. Yet, in 2016/17, more than 2.3 million individual debts were passed to bailiffs by local authorities. Although 4 in 10 local authorities have actually reduced their use of bailiffs in the last two years, total bailiff referrals in local government have increased by 14% between 2014/15 and 2016/17.

There is an alternative. For example, Hammersmith & Fulham Council has ended the use of bailiffs for council tax collection and has launched a new ethical debt collection campaign. The council carry out an income and expenditure assessments to come to an agreement with residents over what can be paid and over what time period. Their specialist Rental Income Team has dealt with 763 local residents to generate £798,000 in extra income for the council while helping residents avoid the stress of falling into debt. And anyone who can afford to pay but refuses to do so will be pursued using more effective, and more ethical, legal means. Treating people with courtesy and understanding and respecting their limited financial resources is both ethical and pragmatic.

By Raquel Jesse, Projects Assistant at CLASS.