Unpaid council tax soars to £6bn as cost of living bites

Unpaid council tax debt has rocketed to £6bn as households reel from the pandemic and the cost of living crisis, according to a new report.

- KATE DEVLIN

Arrears have nearly doubled since before the Covid crisis – when they totalled around £3.6bn.

The figures are contained in a new report published days after the chancellor, Rachel Reeves, said she had identified a £22bn black hole in the nation’s finances since entering government and that she faced “difficult decisions” ahead. Ms Reeves has warned that taxes will have to rise in October to plug the gap, leading to fears Labour could raise money by increasing levies such as fuel duty or by making changes to council tax.

Matthew Greenwood, head of debt at the Centre for Social Justice (CSJ), which compiled the report, said the rise in council tax arrears was “yet more evidence that in many cases, the process of collection is failing local authorities and taxpayers alike”.