Green plans would wipe out millions in Council Tax debt
Decades-old Council Tax debts worth hundreds of millions of pounds will be written off if MSPs agree to changes proposed by Scottish Greens finance spokesperson Ross Greer.
The proposals, tabled as amendments to the Housing Bill, would end the current situation where Council Tax debts in Scotland are chased for four times as long as other forms of debt before being written off.
Data from The Telegraph published in March this year showed that almost £2 billion of Council Tax arrears have been racked up by Scottish households since the Council Tax system was introduced in 1993.
This change would reduce the time limit for Council Tax arrears, at which point the debt is written off and collection efforts are stopped. The current limit for Scottish Council Tax debt is twenty years, despite English, Welsh and Northern Irish Council Tax arrears being written off after just six years.
The twenty year clock also resets every time someone acknowledges or tries to pay off their debts, effectively meaning that debts are held and pursued permanently, even when there is no prospect of them being paid off.
Most other forms of debt in Scotland are subject to a five year cut-off for collection efforts.
If passed, this proposal would effectively cancel any Council Tax debts built up before 2020. Analysis by the Scottish Greens suggests that the move would take hundreds of millions of pounds of debt off of the shoulders of low-income and vulnerable households.
It would also tackle the problem of vulnerable people not seeking help from their local council for other issues in their lives due to fear that they will be chased for debts they cannot afford to pay off.
Anti-poverty campaigners including Aberlour say that current council and government debt collectors “trap families in a cycle of poverty, through seized benefits, missed payments, new loans and extortionate interest.”
Ross said:
“We need to break the decades-old cycle of poverty and debt. Scotland’s system for collecting Council tax debts is far harsher than those in the rest of the UK and that needs to end. My proposals would give relief to people who are often in no position to pay back these decades-old debts, letting them get their lives and finances back on track.
“At the moment, the 20-year clock resets each time someone attempts to pay off or even acknowledge their debt, meaning some councils are still chasing debts from when this system started in 1993. That’s before I was even born.
“And the fear of having bailiffs at the door means vulnerable people aren’t going to their councils for help when they really need it.
“Council tax debt is one of the biggest drivers of Scotland’s public debt crisis, locking thousands of vulnerable people into cycles of poverty which they can’t break out of.
“If we want to end poverty for good and make Scotland a better place to live, we have to end the systems that keep people stuck in cycles of unpayable debts. It is time to wipe out these decades-old Council Tax debts."