Referrals to bailiffs in England and Wales to recover unpaid council debts have risen by nearly 20%, a BBC investigation has found.
Birmingham’s 500% rise in referrals between 2022 and 2023 topped the list of 280 councils that replied to a File on 4 Freedom of Information request.
Figures suggest there is £500m of uncollected public debt each year, adding to councils’ strained finances.
One bailiff said he was incentivised to use underhand tactics.
This is despite industry claims that it has cleaned up its act.
The BBC’s Freedom of Information (FOI) request asked councils for the number of referrals made between April and October 2023, compared with the same period the previous year.
Recently “bankrupt” Birmingham made 43,283 referrals over the seven-month period in 2023.
That was nearly six times the equivalent figure for the same period in 2022 of 7,875 (adjusted for comparison).
The responses from all the councils who came back to us suggest more people are struggling to pay essential living expenses, such as council tax, during the cost of living crisis.
The debts also include parking fines, non-payment of business rates and housing arrears.
The amounts are made worse because once a bailiff is involved fees mount up. But with many councils across England and Wales in financial dire straits every penny is needed to maintain essential services.
What happens when a council debt is not paid?
- Local authority gets court permission to recover money owing, adding around £100 to debt
- Contract given to enforcement agency which writes to debtor, £75 fee
- Debtor receives knock at the door, £235 fee
- If goods are seized and sold at auction, £110 fee
- Costs increase for debts over £1,500 or if High Court bailiffs are involved
For Paul Crichton, the debt spiral was devastating. He could not pay his council tax and considered taking his own life, following the pressure he felt from debt collectors sent by Stockport Council.
The former Army medic told the BBC he fled his house to avoid bailiffs. “They were so antagonistic that I would get up out of the house and basically stay out during normal working hours. My strategy was to stay out of their way,” he told File on 4.
Stockport Council said it only takes enforcement action as a “very last resort”.
However, Joe Cox, senior policy officer for charity Debt Justice, believes the way public sector debt collection is structured is problematic.
“The collection process pushes people further into debt, which means that it’s harder for them to get back on their feet and it’s harder for them to repay the original debt and reset their lives.”
Enforcement companies are not paid by councils and only make money if a debt is successfully recovered by the bailiff or “enforcement agent”.