The debates in the House of Lords about the localisation of council tax have been marred by the Department of Communities and Local Government’s confusion about the procedures for the enforcement of arrears. It all came out in government’s reply to the Zacchaeus 2000 Trusts amendment tabled by Baroness Meacher and supported by all sided except the government. Here are extracts from Baroness Hanham’s replies for the Government and followed by my comments in red.
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Baroness Hanham;
The discussion, as I would have expected, has gone widely into the problems that bring in bailiffs, but it is the bailiffs on whom we are concentrating today. That is what the amendment is about, although I understand that it has triggered much concern about the general situation.
The amendment was emphatically not about the bailiffs but about the local authorities who contract the bailiffs. The opening sentence of the amendment read;
All local authorities shall include procedures in their contracts with bailiff companies covering the enforcement of council tax which allows for the return of a warrant by the bailiffs to the local authority for reconsideration.
I should explain that the amendment does not accurately reflect the way that bailiffs are authorised to take enforcement action in respect of council tax, because no warrant issued by the local authority is involved in the process. Under the Council Tax (Administration and Enforcement) Regulations 1992, bailiffs can be used to recover unpaid council tax-that is, levy distress-only where a magistrates’ court has made a liability order. That was the point made by my noble friend Lord Lucas.
The procedure is as follows; the local authority applies to the magistrates for a liability order; when that has been received by the local authorities they “may” (it is not “shall” so not compulsory) execute a distress warrant by employing bailiffs or a number of other enforcement procedures.
The local authority is allowed to apply for only reasonable costs, and those are capped at £70.
We remain puzzled having researched the charges of 10 local authorities.
|
Council
|
Liability Order
|
Court Summons
|
Total
|
|
Canterbury City Council
|
£50
|
£50
|
£100
|
|
London Borough of Brent
|
£30
|
£90
|
£120
|
|
Newcastle Upon Tyne City Council
|
£42
|
£42
|
£84
|
|
London Borough of Bromley
|
£20
|
£75
|
£95
|
|
Powys County Council
|
£50
|
£10
|
£70
|
|
Baintree District Council
|
£30
|
£65
|
£95
|
|
Sheffield City Council
|
£28
|
£46
|
£74
|
|
Wolverhampton City Council
|
£40
|
£36
|
£76
|
|
Dover District Council
|
£50
|
£50
|
£100
|
|
Rother District Council
|
£20
|
£80
|
£100
|
The totals are all paid to the council be the defaulters
There will be further costs only after distress from the bailiffs is levied. I agree with the noble Lord, Lord Smith, that a great deal of work is involved before schedules are produced before the court-I used to deal with them frequently, and magistrates do not just wipe them through; a lot of questions are asked.
This is not the case in many courts; a summons is sent to the council tax defaulters and the requests for liability orders are presented to the magistrates on computer printouts in 100s or sometimes 1000s; they are passed on the nod to such an extent that it is sometimes impossible for the council to produce a properly authorised liability order after the bailiffs have visited. (I have dealt with such a case myself) The following extract from the Solicitors Journal is relevant – 22 October 2004.
Errors in local taxation cases are nothing new, but the bulk-issuing of thousands of liability orders in magistrates’ courts in the taxpayers’ absence has resulted in numerous innocent people being caught in the system. Often the first notice of a liability order comes in a bailiff’s letter demanding payment, sometimes weeks or months after the order was granted, but where the taxpayer has never been informed of the original proceedings.
Section 82 of the Local Government Act 2003 The government has enabled local authorities to apply to magistrates’ courts to quash liability orders. The drawback with this measure is, of course, that the right to quash the order is wholly reliant on the local authority being willing to act. Naturally, many authorities will be reluctant to commence proceedings since this will result in potential revenue loss.
If defaulters respond to the summons by visiting the court on the day of their liability order hearing they will find an official of the local authority willing to make an arrangement for the payment of the arrears. The magistrates never see these people. It is entirely the responsibility of the council to recognise and respond to vulnerable and impoverished claimants.
Everyone should obviously connect with the council on receipt of a letter advising them of council tax arrears and respond to a summons, and many people who should and can do that do not.
But vulnerable and impoverished defaulters often have a very good reason for not contacting the council and for not paying council tax arrears. Council officials often do not know the circumstances of their fellow citizens and constituents; so they despatch the bailiffs who are the first people to meet any vulnerable situation; that is why the amendment is so important.
The councils should insert a clause in their contracts with the bailiff companies to ensure cases are returned to them by the bailiffs from the doorsteps of their vulnerable and impoverished constituents for further consideration.
That was a slight diversion.
It was the heart of the problems associated with the enforcement of council tax arrears against vulnerable and impoverished defaulters.
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However, whether enforcement action is justified is a matter for local authorities and, finally, the courts, having taken account of all the relevant information on a case-by-case basis.
Liability orders are mostly issued by the magistrates in total ignorance of the circumstances of the council tax defaulter against whom a council seeks to enforce arrears; the only other contact will be if a council seeks to imprison the defaulters; at that point the magistrates may remit the debt in all or in part, or imprison.
Of course it is the local authority’s responsibility to ensure that it is taken only after all the procedures and all efforts have been made to have the matter dealt with in another way.
In many cases no other effort is made other than sending a letter, which the defaulter might not be able to read. Short staffed councils waste time and money trying to enforce against people who cannot pay their arrears by creating further council and liability order costs which can never be recovered.
Although the Government have no plans to make changes to the enforcement regime for council tax, which is what we are talking about in particular, as my noble friend Lord Lucas mentioned, we are looking at bailiff reform.
