£19m lost due to unpaid council tax

Paul McKevitt
Paul McKevitt

Wigan Council would be £19m better off if everyone had paid their council tax since it started, shock figures reveal.

A request by the Wigan Observer under the Freedom Of Information Act shows a total of £18,961,370 was owed to Wigan Council at the end of the 2014-15 financial year.

“In 2014/15 Wigan Council collected 95 per cent of the £117.6m due for that year plus arrears from previous years and therefore met the budget requirement for the year.”

Paul McKevitt, Wigan Council’s deputy chief executive

And that amount is only likely to have risen further in the year or so since.

The arrears were the amount outstanding since council tax was introduced in 1993-1994.

The cumulative amount owed increased by nearly 20 per cent, from £15.8m in 2013-14. The total owed in 2012-13 was £14.4m.

It comes as the council continues to make savings due to ongoing funding cuts from the Government.

Paul McKevitt, the council’s deputy chief executive (pictured right), said: “We have a robust and proactive approach to council tax collection so we can achieve the target set in the annual budget. This enables the council to fund vital council services.

“In 2014/15 Wigan Council collected 95 per cent of the £117.6m due for that year plus arrears from previous years and therefore met the budget requirement for the year.

“Each year there is always a very small amount of uncollected council tax. This may be for a number of reasons including bill recalculations late in the financial year, taxpayers struggling to pay in the set time or the taxpayer leaving the area and the council are tracing their whereabouts.

“In Wigan, since 1993 we have raised council tax bills to the value of £1.844bn. We have collected council tax income to the value of £1.825bn. The amount that was unpaid for the 22 years was £18.9m. We have 141,400 properties. This equates to less than £6 per year per household per year, or one per cent of the total council tax due. This means we collect 99 per cent of all council tax due over time.”

The information obtained by the Observer also revealed that the largest amount of council tax owed by an individual was £13,308.85. The smallest amount owed was just one penny.

Council tax reduction is available to some people who are on a low income or claim benefits and it replaced council tax benefit in 2013.

In Wigan, there are currently 28,732 claimants, who receive reductions of between 69p and £2,386.76. The council can take action against those who do not pay council tax and the information shows 25,287 people were summoned to court for non-payment in 2015-16.

That was a drop of nearly five per cent compared to the year before, when 26,608 people were summoned, But council chiefs have been warned about their use of bailiffs.

Citizens Advice says it has seen a surge in requests nationwide for help with council tax debts, but that sending in collectors often made residents’ problems worse.

Lesley O’Halloran, assistant director of customer services, said alternative monthly pay arrangements were available: “When we first issue a magistrate court summons for non-payment we automatically offer them an alternative monthly pay arrangement to attempt to avoid the need for us to enforce the liability order.”