Council tax arrears biggest debt problem seen by Citizens Advice in Wales

Council tax arrears is now the largest debt issue seen by the Citizens Advice network in Wales representing 13 per cent  of all debt issues.

A new report from Citizens Advice Cymru; Fairness for all - Improving council tax debt collection in Wales highlights the findings of research undertaken to better understand the recent increase in council tax arrears seen over the last few years.

Council tax debt has often been one of the biggest debt-related problems seen by the charity however the number of council tax arrears problems has steadily risen over the past five years.

In 2014 to 2015 it became the largest single debt-related issue seen by the network in Wales.

This trend continued during 2015 to 2016 when 5,947 people came for help with over 16,000 problems, an increase of 7 per cent compared with the previous year.

In April 2013 the UK Government abolished council tax benefit (CTB) and responsibility for its replacement, localised council tax support (CTS), was devolved to the national government in Wales. At the same time the budget to provide such support was cut by 10%.

The Welsh Government have a national Council Tax Reduction (CTR) Scheme with a commitment to provide additional funding to local authorities, until at least 2016-17, to meet the full costs of the CTB system at the point of abolition. This means at the moment, recipients in Wales receive the same level of support they would have received under the old CTB system. In spite of this local Citizens Advice offices in Wales are continuing to see steady increases year-on-year in council tax arrears problems.

The research found that undoubtedly low income is the largest contributory factor for people struggling to pay their council tax bills wherever they live.

And looking in greater detail the charity found that the profile of the people who sought help for council tax arrears (CTA) in Wales between April 2014 and March 2016 showed:

• almost 90% are of working age

• 3 in 10 are living with a disability or long term health condition

• 1 in 5 are employed (either part-time, full-time or self-employed)

• 6 in 10 rent their homes (slightly more rent from social landlords)

• 2 in 5 have dependent children in the household

• 1 in 4 live alone.

The charity states that council tax arrears problems vary quite considerably across Wales, with good or poor practice being identified in some local authority areas, and a mixed picture being evident in many other areas.

Throughout the research it became clear that there are significant aspects common to many local authorities in Wales where improvements need to be and could be made.

Key areas of concern relate to the perceived over-use of bailiffs, inadequate processes for identifying debtors in vulnerable situations, and debtors frequently being asked for repayments they simply can’t afford.

Other areas for improvement included the need to make greater use of alternative repayment options and the need to improve communication, not only with debtor households but also within the local authority itself.

From a clients’ perspective in many ways the findings of this research paint a picture of the realities of in-work poverty and a life on benefits.

For many, current collection methods, where Liability Orders are regularly sought and debts readily passed to bailiffs, are counter-productive and only serve to increase the debt, after fees and charges are added, and prolong the stress and anxiety for debtors.

Advisers expressed their concern about the capacity of many low income households in Wales, whether solely reliant on benefits or in low paid, irregular work, to meet their council tax liabilities.

Fran Targett, Director Citizens Advice Cymru, said:

“There is an on-going shift in the nature of debt problems being seen by local Citizens Advice across Wales. We have seen increasing numbers of people seeking help with arrears on essential household bills.

“I find that the whole situation is particularly worrying, people need to be made aware of the severe consequences of not paying priority debts such as council tax. They include local authorities taking enforcement action through the courts, and in extreme cases imprisonment.

“Our research emphasises the need for both local authorities and debtors to be more responsive earlier in the process to help ensure people’s circumstances are fully understood and more appropriate action is taken.

“We encourage people struggling to pay their bills to seek help as soon as possible. Once agencies like Citizens Advice are involved the critical factors which support things working well include trust, mutual respect and a willingness to listen to and act on advisers’ requests. This can result in a fairer outcome for the local authorities and the debtors”.

The on-going impact of welfare reform and potential future changes to the Council Tax Reduction scheme in Wales, highlights the important need for the Welsh Government, WLGA, local authorities and advice agencies such as Citizens Advice, to work together to inform and improve council tax debt collection practices so that they work for the benefit of both local authorities and debtors.

Ôl-ddyledion y dreth gyngor – y broblem dyledion fwyaf y mae Cyngor ar Bopeth yng Nghymru yn delio â hi

Yn ôl rhwydwaith Cyngor ar Bopeth yng Nghymru, ôl-ddyledion y dreth gyngor yw’r broblem dyledion fwyaf maen nhw’n delio â hi yng Nghymru, ac mae’n gyfystyr â 13 y cant o’r holl broblemau dyledion.

Mae adroddiad newydd gan Cyngor ar Bopeth Cymru -Tegwch i bawb - Gwella sut y cesglir dyledion y dreth gyngor yng Nghymru– yn nodi canfyddiadau ymchwil a gynhaliwyd i geisio deall y cynnydd diweddar yn ôl-ddyledion y dreth gyngor dros y blynyddoedd diwethaf.

Mae dyledion y dreth gyngor bob amser wedi bod yn un o’r problemau dyledion mwyaf y mae’r elusen yn gorfod delio â hi, ond mae nifer problemau ôl-ddyledion y dreth gyngor wedi cynyddu’n raddol dros y pum mlynedd diwethaf.

Rhwng 2014 a 2015, datblygodd i fod y broblem dyledion fwyaf sy’n wynebu’r rhwydwaith yng Nghymru.

Parhau wnaeth y duedd hon rhwng 2015 a 2016 pan ddaeth 5,947 o bobl at yr elusen am help gyda thros 16,000 o broblemau, sef cynnydd o 7 y cant ers y flwyddyn flaenorol.

Ym mis Ebrill 2013, diddymodd Llywodraeth y DU fudd-dal y dreth gyngor (CTB), a chafodd y cyfrifoldeb dros yr hyn a ddaeth i’w ddisodli, sef cymhorthdal y dreth gyngor (CTS), ei ddatganoli i Lywodraeth Cymru. Ar yr un pryd, cafwyd toriad o 10% yn y gyllideb i ddarparu cymhorthdal o’r fath.

Mae Llywodraeth Cymru wedi cyflwyno Cynllun Gostyngiadau’r Dreth Gyngor (CTR) gydag ymrwymiad i ddarparu cyllid ychwanegol i awdurdodau lleol hyd at 2016-17 o leiaf, i dalu costau llawn y system CTB ar ôl iddi gael ei diddymu. Mae hyn yn golygu bod pobl Cymru, ar hyn o bryd, yn derbyn yr un lefel o gymorth ag y byddent wedi’i derbyn o dan yr hen system CTB. Er gwaethaf hyn, mae swyddfeydd Cyngor ar Bopeth lleol yng Nghymru yn dal i weld cynnydd graddol yn nifer problemau ôl-ddyledion y dreth gyngor flwyddyn ar ôl blwyddyn.

Daeth yr ymchwil i’r casgliad mai incwm isel yn ddi-os yw’r ffactor cyfrannol mwyaf i bobl sy’n ei chael hi’n anodd talu biliau’r dreth gyngor, ble bynnag y maen nhw’n byw.

O edrych yn fwy manwl, gwelodd yr elusen fod proffil y bobl a wnaeth gais am help gydag ôl-ddyledion y dreth gyngor (CTA) yng Nghymru rhwng mis Ebrill 2014 a mis Mawrth 2016 yn dangos:

• bod bron i 90% o oedran gweithio

• bod 3 o bob 10 yn byw gydag anabledd neu gyflwr iechyd tymor hir

• bod 1 o bob 5 yn gweithio (naill ai’n rhan-amser, yn llawn amser neu’n hunangyflogedig)

• bod 6 o bob 10 yn rhentu eu cartrefi (gydag ychydig yn fwy yn rhentu gan landlordiaid cymdeithasol)

• bod gan 2 o bob 5 blant dibynnol yn y cartref

• bod 1 o bob 4 yn byw ar eu pennau eu hunain.

Mae’r elusen yn nodi bod problemau ôl-ddyledion y dreth gyngor yn amrywio’n eang ar draws Cymru, gydag arferion da neu wael yn cael eu nodi mewn rhai ardaloedd awdurdod lleol, a darlun cymysg mewn llawer o ardaloedd eraill.

Drwy’r ymchwil i gyd, daeth hi’n glir bod rhai elfennau arwyddocaol yn gyffredin i lawer o awdurdodau lleol yng Nghymru, a bod angen gwneud gwelliannau yn y meysydd hynny.

Mae yna bryder arbennig ynglŷn â’r gorddefnydd o feilïaid, prosesau annigonol ar gyfer nodi dyledwyr sydd mewn sefyllfaoedd bregus a’r duedd i ofyn i ddyledwyr dro ar ôl tro am ad-daliadau nad ydyn nhw’n gallu fforddio eu talu.

Roedd meysydd eraill i’w gwella yn cynnwys yr angen i wneud mwy o ddefnydd o opsiynau ad-dalu amgen a’r angen i wella dulliau cyfathrebu, nid gyda’r dyledwr yn unig ond gyda’r awdurdod lleol ei hun hefyd.

O safbwynt cleientiaid, mae canfyddiadau’r ymchwil hwn yn cyflwyno darlun o realiti tlodi mewn gwaith a bywyd ar fudd-daliadau.

I lawer, mae’r dulliau casglu presennol, lle mae Gorchmynion Dyled yn cael eu ceisio’n rheolaidd a dyledion yn cael eu trosglwyddo i feilïaid, yn wrthgynhyrchiol gan eu bod yn cynyddu’r ddyled, ar ôl i ffioedd a thaliadau gael eu hychwanegu, ac yn gwaethygu straen a phryder y dyledwyr.

Mynegodd cynghorwyr eu pryder ynglŷn â gallu llawer o gartrefi incwm isel yng Nghymru, waeth a ydynt yn dibynnu ar fudd-daliadau neu mewn swyddi incwm isel, afreolaidd, i dalu’r dreth gyngor.

Meddai Fran Targett, Cyfarwyddwr Cyngor ar Bopeth Cymru:

“Mae Cyngor ar Bopeth yng Nghymru yn gweld newid parhaus yn natur problemau dyledion. Rydym ni wedi gweld mwy a mwy o bobl yn gofyn am help gydag ôl-ddyledion ar filiau hanfodol y cartref.

“Mae’r sefyllfa’n peri pryder mawr i mi; mae angen i bobl fod yn ymwybodol o ganlyniadau difrifol methu â thalu dyledion sy’n flaenoriaeth megis y dreth gyngor. Maen nhw’n cynnwys awdurdodau lleol yn cymryd camau gorfodi drwy’r llysoedd ac, mewn achosion eithriadol, carchar.

“Mae ein hymchwil yn pwysleisio’r angen i awdurdodau lleol a dyledwyr fod yn fwy ymatebol yn gynharach yn y broses i helpu i sicrhau bod amgylchiadau pobl yn gwbl glir a bod camau mwy priodol yn cael eu cymryd.

“Rydym ni’n annog pobl sy’n ei chael hi’n anodd talu eu biliau i ofyn am help cyn gynted â phosibl. Unwaith i asiantaethau megis Cyngor ar Bopeth ddod yn rhan o’r broses, mae’r ffactorau hollbwysig sy’n helpu pethau i weithio’n dda yn cynnwys ymddiriedaeth, parch a pharodrwydd i wrando a gweithredu ar geisiadau cynghorwyr. Gall hyn arwain at ganlyniad tecach i’r awdurdodau lleol a’r dyledwyr.”

Mae effaith barhaus diwygio lles a newidiadau posibl i Gynllun Gostyngiadau’r Dreth Gyngor yng Nghymru yn y dyfodol yn dangos pa mor bwysig yw’r angen i Lywodraeth Cymru, CLlLC, awdurdodau lleol ac asiantaethau cynghori megis Cyngor ar Bopeth weithio gyda’i gilydd i lywio a gwella arferion casglu dyledion y dreth gyngor fel eu bod o fudd i awdurdodau lleol a dyledwyr.

Notes to editors

1. The report Fairness for all: improving council tax collection in Wales can be found here.

2. Citizens Advice Bureaux are now known as local Citizens Advice offices.

3. The Citizens Advice Cymru Advice Trends In Wales 2015-16 can be found here.

4. The Citizens Advice service comprises a network of local Citizens Advice, (all of which are independent charities), the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.

5. Citizens Advice Bureaux in Wales advised 108,075 clients on 416,075 problems from April 2015 to March 2016.

6. To find your local Citizens Advice in Wales, visit www.citizensadvice.org.uk

7. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers.