Legal action is being taken by Liverpool Council in a bid to claw back millions of pounds it is owed in Council Tax.
One of the three ways the city receives income is through the collection of the annual duty placed on households throughout Liverpool.
Cllr Ruth Bennett, deputy leader and cabinet member for finance, told a meeting of the authority’s executive that efforts are now being ramped up in a bid to get almost £7m back.
It was revealed last year Liverpool’s Council Tax collection rate was almost 10% below the national average with only Birmingham having a higher level of arrears for the year.
Around £185m in council tax debt remains outstanding to Liverpool Council as part of its bad debt provision, the majority of which it doesn’t expect to get back. Writing earlier this week, Cllr Bennett explained how the authority wanted to retrieve as much as possible.
She said, “Cuts to the council budget by central government since 2010 means that income from locally collected council tax is more important than ever. Every pound that we don’t collect, is a pound less to spend on services which Liverpool people value.
“It is true that the pandemic impacted the ability of many local authorities to enforce collection of Council Tax as courts were suspended, but the fact is our collection rate has simply not been good enough. In 2021-22 we only collected 83.9% of the money owed compared to a national average of 93.8%.”
The council is now targeting 100 of its biggest debtors to claw back millions of pounds. These include a mix of individuals who owe Council Tax on properties they own, and landlords who are liable for tax between tenancies.
Cllr Bennett added, “In the last three months we have commenced legal proceedings, including petitioning for bankruptcy, for £6.8m of Council Tax debt for this group, and it is starting to deliver results. People who have ignored letter after letter, year after year, are now actively seeking to settle their debt to the city – in some cases handing over tens of thousands of pounds.
“This is not just money for the council’s coffers – it helps pay for the services we value such as social care support, street cleansing, libraries and many more. Balanced against this tougher approach, we are acutely aware that the Cost of Living crisis means there are people who genuinely can’t afford to pay.
“They should be reassured that Liverpool Council remains one of the most generous councils in the country when it comes to supporting vulnerable households. This includes working with Citizens Advice and the voluntary sector to help households claim Council Tax support, or other reductions in liability, or to provide longer periods of time to pay what is owed. All we ask is that you contact us if you are in difficulty.”
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