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Council Tax Collection Arrangements in Scotland and England & Wales - Research Findings

DescriptionSummary of study to identify the factors that may be responsible for the higher council tax in-year collection rates in England and Wales compared to Scotland.
ISBN0 7480 9359 1
Official Print Publication Date
Website Publication DateMay 03, 2000
Development Department Research Programme Research Findings No. 80Council Tax Collection Arrangements in Scotland and England & Wales

Institute of Revenues, Rating and Valuation

This study examined the factors that may be responsible for the difference in council tax in-year collection rates between Scotland and England and Wales. The study looked at differences in the billing and collection arrangements in Scotland and in England and Wales and also took the views of revenue practitioners and enforcement agents. The study was commissioned by the joint COSLA/Scottish Executive Working Group on Council Tax Collection and was carried out by the Institute of Revenues, Rating and Valuation.

Main Findings

  • The legacy of community charge debt was approximately 10 times greater in Scotland than in England on a per capita basis and greater public resistance to paying local taxes, first manifested under the community charge system, had also developed in Scotland.
  • Local government reorganisation had a greater impact on local taxation services in Scotland, giving rise to changes (in terms of computer systems, processes and personnel) which were still having a significant impact in the period covered by this study.
  • There was political resistance to the use of poindings and warrant sales by some Scottish authorities.
  • The Debtors (Scotland) Act 1987 was considered by many revenues and enforcement practitioners to give greater protection to debtors than comparable legislation in England and Wales.
  • English and Welsh authorities can issue council tax bills in advance of the financial year, allowing the date for the first instalment to be set as early as 1 April and can issue a combined first and final reminder notice; as a result they could move more quickly through the collection and recovery stages within the financial year than their Scottish counterparts.
  • The liability order process in England and Wales was seen to be simple and effective, allowing the issue of individual court summonses at low cost. Magistrates' power to commit a debtor to prison if found guilty of wilful refusal or culpable neglect to pay was seen to assist in eliciting payment.
  • Scottish authorities tended to have less formal relationships with their sheriff officers than English authorities did with their bailiffs, with the use of service level agreements found to be rare in Scotland.
  • The inclusion of water and sewerage charges in Scottish council tax bills impacted on collection rates because overall bills were higher, and the water and sewerage element was not covered by council tax benefit, leaving people on income support with a continuing liability.


Scotland achieves significantly lower in-year collection rates for council tax than England and Wales (hereafter referred to as England). In 1997/98, Scottish local authorities collected 87.3% of the council tax due within the year, while the in-year collection rate for England was 95.5% 1. Against this background, this research aimed to identify the factors that may be responsible for this difference in council tax in-year collection rates. Specifically, the research objectives were:

  • to gather information on the procedures followed by local authorities in Scotland and England in collecting council tax and recovering council tax debts, and on the success of those procedures;
  • to identify differences in procedures and practice of council tax collection in Scotland and England, and the reasons for these differences;
  • to identify the main factors affecting in-year collection rates in Scotland and England; and
  • to identify problems (if any) with current administrative and legal arrangements and possible suggestions which could assist Scottish local authorities in their duties to collect and recover council tax.

Research approach and methods

The project team used as its baseline the financial year 1997/98 and gathered data and views relating to that period. The research involved 3 main methods:

  • A comparison of relevant legislation
  • Quantitative research, examining the characteristics of council tax administration, billing, payment, recovery and enforcement methods in both Scotland and England.
  • Qualitative research, focusing on the experiences and views of local authority revenues practitioners, enforcement agents and key specialist government officers.

Background for Scottish levying authorities in 1997/98

The research noted a number of issues which formed part of the background against which council tax collection was carried out:

The complete reorganisation of Scottish local authorities in 1996 still affected revenues functions in 1997/98 (the period studied by this research). Council tax collection and the administration of council tax benefit had previously been regional functions while housing benefit had been administered by districts. The simultaneous aggregation and disaggregation of functions to unitary authorities brought about large-scale change to computer systems and staffing.

In contrast, the newly established Welsh unitary authorities in 1996 faced the task of aggregating revenues systems of the former districts, but this was easier than disaggregation. Reorganisation in England was limited in scale and only one newly created authority in England had to deal with solely aggregating functions of former authorities.

Some Scottish unitary authorities faced particular IT difficulties in 1997/98. One supplier failed to provide the required Scottish system enhancements within the necessary timescale, while another withdrew its product from the Scottish market, leaving clients without systems.

Factors impacting on council tax collection rates

The research identified 2 types of factor impacting on collection rates:

  • Environmental - the political and social context within which local authorities operate.
  • Process - the legislative framework and procedures used by local authorities.

Environmental factors

The legacy of community charge debt was approximately 10 times greater in Scotland than England on a per capita basis. As well as this financial legacy, since the community charge, there has been greater public resistance to paying local taxes in Scotland. Importantly the community charge was in place one year longer in Scotland than in England, allowing greater resistance and greater debt to build up.

A number of legal changes brought in under community charge are considered to have had an impact. Unlike under the rating system, public sector tenants for the first time paid local tax separately from their rent. This separation disrupted previously well-maintained local tax payment profiles for many council tenants. Although this separation also applied in England, the impact was greater in Scotland due to its higher proportion of public sector housing.

The Debtors (Scotland) Act 1987, in the view of Scottish revenues practitioners and English bailiffs, places greater restrictions on the range of goods that can be taken and sold in settlement of a debt than does the corresponding legislation for distress in England. Enforcement measures were seen to have been further weakened by the political resistance to the use of poinding and warrant sales by some local authorities in Scotland.

Local tax bills in Scotland are also higher than in England and Wales because they incorporate water and sewerage charges collected by councils on behalf of the water authorities, which is not the case in England and Wales. While council tax benefit is available for people on low incomes, no rebates are available on the water and sewerage charges, leaving a relatively high bill for people on low incomes, which can impede collection.

Process factors

Differences in legislation

English local authorities can issue bills in advance of the financial year, and set the date for the first instalment to be paid on 1 April or thereafter - a month before the first possible instalment in Scotland. They can also issue a combined first and final reminder notice, so only one notice needs to be issued prior to enforcement action. English authorities are thus able to commence and move through the billing, collection and recovery procedures more quickly within the financial year than is possible in Scotland.

In England and Wales, local authorities can issue individual summonses to debtors simply and at low cost, requiring the debtor to appear before a magistrates' court to contest the issue of a liability order. They have the power to request the magistrates' court to carry out a means enquiry in relation to a debtor's ability to pay. In addition, if satisfied that the circumstances justify it, and that there has been wilful refusal and culpable neglect to pay the debt, magistrates can make an order to commit the debtor to prison. Thus, English and Welsh local authorities have an ultimate sanction to coerce payment, which is not available in Scotland. These steps were seen as important prompts to pay by revenues practitioners, north and south of the border.

Differences in processes

Statistics gathered as part of this research showed that, in general, Scottish authorities moved more slowly from one stage to the next in the collection and recovery process than their English counterparts.

When dealing with multiple-year debtors, Scottish authorities were less likely than English authorities to attribute payments to the current year's account thus impacting on in-year collection rates.

English and Welsh local authorities tended to have greater control of the caseload being dealt with by external agents for enforcement action and have direct control over the enforcement powers they themselves institute. IT links between local authorities and external agents were more developed in England than Scotland, and service level agreements, detailing local authority requirements regarding the pursuit of their caseload and general liaison arrangements, were also much more common south of the border.

A smaller proportion of cases in England than in Scotland required applications to the Benefits Agency for attachments of income support, principally because of the absence of non-rebated water and sewerage charges. Consequently, fewer English authorities were subject to the backlogs at the Benefits Agency experienced by Scottish local authorities.

Measures which could improve council tax collection

The research team concluded that there was no one single measure that would bring about an immediate change in in-year collection rates in Scotland. Improvements would, they believed, come from adopting a range of strategies. The researchers recommended that the Scottish Executive and Scottish local authorities consider a number of areas where they thought changes could be made, including:

Legislative issues

  • Changing the timing of the first instalment of council tax payments
  • Allowing the issue of a combined reminder and final notice
  • Introducing measures relating to council tenants, such as joint billing of council tax with rent though council tax revenues systems, changes in tenancy agreements so that any council tax debt could carry the penalty of eviction, and removing the right to buy from tenants who are in arrears with local taxes
  • Re-examining the Debtors (Scotland) Act 1987 in terms of the range of goods protected from poinding and warrant sale, or looking at issuing guidance on its scope
  • Reviewing the use of committal as an ultimate sanction for non-payment of council tax

Process issues

  • Addressing the legacy of community charge debt
  • Addressing the backlog of applications for deductions from income support by making available more staff resources in relevant Benefits Agency offices, and encouraging liaison between local authorities and Agency offices
  • Encouraging debtors to allocate any payments made in a financial year to the current year's bill first and, once that is fully paid, to allocate any additional payments to previous years' arrears; this would improve in-year collection rates as well as being a major step towards reducing the overall indebtedness of individuals
  • Executing billing, reminder and recovery procedures as promptly as possible and passing cases to sheriff officers timeously
  • Addressing the issue of political resistance in some authorities to the use of poinding and warrant sales and the related restrictions on revenues practitioners, which prevent them from freely selecting enforcement options
  • Reviewing working arrangements with sheriff officers

Concluding remarks

It is the view of the research team that neither a settled period after reorganisation nor environmental and legislative improvements will, on their own, bring the national average collection rate in Scotland to English levels, within a satisfactory timescale. The study concludes that, if an in-year collection rate in Scotland equivalent to that achieved in England is to be the aim, significant and immediate changes must be considered.

Finally, the rights and responsibilities of the citizen should be fully addressed. Council tax is borne by all households (with some statutory exemptions) to pay for services enjoyed by all households, and it is a duty of each liable citizen to pay the amount due. Unlike most creditors, local authorities cannot stop providing services to individuals who do not pay. The study concludes that, if people do not pay, local authorities must have in place the mechanisms to identify and deal with such cases promptly, and must have access to a range of efficient, effective and acceptable enforcement powers


About this study

As a response to recommendations in a 1998 Accounts Commission for Scotland report, the then Secretary of State for Scotland and COSLA agreed to establish a joint Scottish Office / COSLA Working Group on Council Tax Collection to explore ways of improving collection rates. In November 1998 the Working Group issued a consultation document, 'It Pays to Collect'. This considered legislative solutions to a list of measures formerly proposed by COSLA, and other issues and measures that might improve collection levels in Scotland. The paper also proposed a study to examine differing statutory arrangements relating to council tax collection in Scotland and England. The Working Group subsequently commissioned the Institute of Revenues, Rating and Valuation to carry out this research in January 1999.

The research involved quantitative and qualitative methods. All 32 Scottish local authorities were invited to complete postal questionnaires, along with 33 English local authorities, selected to provide a broad match to the Scottish authorities. A total of 30 Scottish levying authorities and 20 English and Welsh billing authorities provided data for the study. Interviews were then conducted with revenues section heads in 10 Scottish authorities and 10 English authorities (again, broadly matched), and with key contacts in additional organisations with interests in the field of council tax collection and enforcement. The project also involved an analysis of available statistical and research data, and an examination of relevant legislation. Fieldwork was conducted in the spring of 1999.

The resulting report (summarised here) allowed the Working Group to draw on research evidence (amongst other sources) in considering how in-year collection rates might be improved. The Working Group's own final report putting forward its views and recommendations, 'It Pays to Pay', was published on 22 December 1999.

If you wish a copy of 'Council Tax Collection Arrangements in Scotland and England & Wales', the report which is summarised in this Research Findings, please send a cheque for £5.00 made payable to The Stationery Office to:

The Stationery Office Bookshop, 71 Lothian Road, Edinburgh, EH3 7AZ

Tel: 0870 606 5566; Fax: 0870 606 5588; http://www.tsonline.co.uk/

If you wish further copies of this Research Findings or have any enquiries about the work of CRU, please contact us at:

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Tel: 0131-244 7560, or Email: cru.admin@scotland.gov.uk

Website: www.scotland.gov.uk/cru

This document (and other CRU Research Findings and Reports) and information about the work of CRU may be viewed on the Internet at http://www.scotland.gov.uk/cru/ .

The site carries up-to-date information about social and policy research commissioned and published by CRU on behalf of the Scottish Executive. Subjects covered include transport, housing, social inclusion, rural affairs, children and young people, education, social work, community care, local government, civil justice, crime and criminal justice, regeneration, planning and women's issues. The site also allows access to information about the Scottish Household Survey.

1 Sources: Scottish Executive and DETR