Council tax and rent arrears on the rise among StepChange Scotland clients

New quarterly data released by StepChange Debt Charity Scotland reveals the continued impact of the wider cost of living pressures as almost two fifths of new clients (37%) responsible for paying council tax bills were in arrears between July and September, up from 31% in the previous quarter. The charity has also reported an uptick in new clients with rent arrears, rising to a quarter (25%) in Q3 of 2023, up from 21% in Q2.

While the summer months have led to a slight reduction in the proportion of clients with energy arrears, the cost of living remains the biggest driver of debt for new clients, with one in four (25%) clients citing this at the time of advice, up by four percentage points compared to the same period in 2022 (21%).

Meanwhile the new figures show a jump in the proportion of StepChange Scotland clients in receipt of Universal Credit, rising by seven percentage points year-on-year to almost two in five in Q3 of 2023 (38%), potentially indicating that high inflation continues to have the biggest impact on those with the lowest incomes.

StepChange Scotland has raised concerns for some time around the proportion of its clients that hold council tax arrears, as well as the excessive and punitive action that is often taken by local authorities to collect these debts.

Richard Lane, Director of External Affairs at StepChange Debt Charity Scotland, said:

“It’s a worry to see the proportion of clients in arrears with essential bills in Scotland creep up, especially as the weather turns and energy bills begin to put a greater burden on people’s budgets again. While energy bills have dropped from the record highs we saw last year, less government support and a build up of arrears across other household bills will make this winter just as challenging for households.

“When it comes to council tax, falling behind on payments can spiral into significant amounts of debt quite rapidly, with some local authorities quick to resort to enforcement action, such as the use of sheriff officers, to collect arrears. For someone struggling to make ends meet, paying back arrears whilst covering daily essentials can be near impossible, leaving them trapped in mounting debt. We would urge local authorities to take a more supportive approach toward council tax collection, taking into account financially vulnerable groups to prevent further financial harm as the cost of living crisis rages on.”