28 Apr 2020 | Posted In Money advice news

The UK’s largest debt advice charities have welcomed emergency legislation banning bailiffs from visiting homes to enforce debts during Covid-19 restrictions – but say the Government “must go further” in helping people struggling with council tax bills as a result of the outbreak.

Citizens Advice, Money Advice Trust and StepChange Debt Charity raised concerns with Ministers last month over reports of bailiffs continuing to visit homes even after social distancing rules came into force – and are now warning that other forms of contact from bailiffs are still continuing a month into the lockdown being in place.

The charities are calling on the Government to support every local authority to offer 3-month council tax payment breaks to residents financially impacted by Covid-19 – and have renewed calls for independent regulation of the bailiff industry, to protect people in debt after the suspension on visits is lifted.

Visits banned, but contact continues

The Taking Control of Goods and Certification of Enforcement Agents (Amendment) (Coronavirus) Regulations 2020, laid in Parliament late on Friday and coming into effect immediately, prevent bailiff visits during the period in which Coronavirus restrictions are in place.  Other bailiff action which falls short of in-person visits, such as contacting people by telephone, is not included in the ban – leading to continued concerns over the impact of bailiff contact on vulnerable people during the outbreak.

According to a Ministry of Justice memorandum, the new policy “has had to be developed at fast pace to respond to the public health risk of enforcement activity at residential premises and on public highways”.  The document expresses Ministers’ concern “that without clarity from the Government … enforcement agents may come under pressure from their employing firms and from creditors, who may be facing financial pressures themselves, to undertake enforcement visits which could endanger the health of both enforcement agents and debtors.”

Debt charities have been calling for independent regulation of bailiffs and bailiff firms for the last three years, after widespread evidence that reforms introduced in 2014 had not been effective.  The Justice Select Committee recommended independent regulation last year, and in February a cross-party group of MPs urged the Government’s to “break its silence” on bailiff industry reform, more than a year after the close of the Ministry of Justice’s call for evidence on the case for regulation.

Calls for further action

In a joint letter last month, the chief executives of Citizens Advice, Money Advice Trust and StepChange Debt Charity called on the Government to suspend all local authority bailiff action on both public health and financial support grounds, and help people struggling with council tax bills as a result of Covid-19.  Money Advice Trust research has shown that local authorities in England and Wales referred 2.6 million debts to bailiffs in the 2018/19 year, of which 1.4 million were for council tax arrears.

 The charities say the Government must now go further by:

  • Supporting every local authority to offer 3-month council tax payment breaks to those affected financially by Covid-19, funded by central government
  • Suspend current rules that mean people become liable for the whole of their annual council tax bill after one missed payment, to ensure that people who do fall behind during the Covid-19 outbreak do not fall further into debt.
  • Bring forward plans to introduce independent regulation of the bailiff industry, as recommended by the Justice Select Committee.

Dame Gillian Guy, chief executive of Citizens Advice, said:

“Millions of people are worried about the consequences of falling behind on their council tax bill. This is a welcome move from the government that will offer those people some security.

“The necessary lockdown has decimated many people’s incomes. To avoid council tax arrears forcing people into unmanageable debt, the government needs to consider further measures. Stopping people from becoming liable for the whole year’s bill after one missed payment is an immediate priority. Local authorities also need support to offer payment holidays for people who are struggling because of Covid-19.”

Joanna Elson OBE, chief executive of the Money Advice Trust, the charity that runs National Debtline, said:

“We are pleased that the Government has now legislated to ensure that no more bailiff visits will take place for the immediate future – but their concern over this shows why independent bailiff regulation is badly needed.  We now need to see further action for people who are struggling with council tax bills – including 3-month payment holidays where needed, and changes to outdated rules that risk pushing more people into debt.  If the Government does not act on council tax, we are risking a rush of bailiff visits to collect the resulting arrears after this crisis is over.”

Phil Andrew, chief executive of StepChange Debt Charity, said:

“This emergency legislation is welcome, and reinforces our view that if the debt enforcement system can’t be fully relied upon to hold off inappropriate action during the emergency period without legislation, then it can’t be relied on to operate to high standards of practice without a formal regulatory system in the long term either. That’s why we regard statutory regulation of the bailiff sector as a vital next step that the Ministry of Justice should take, which would give greater confidence that debt enforcement will be handled more appropriately in the future, addressing the woeful inadequacies that have caused such harm and detriment to vulnerable people in the past.”​