Welsh authorities 'fail to collect' £38m in council tax

More than £1bn was collected in council tax last year

Local authorities in Wales failed to collect more than £38m in council taxes last year, official figures show.

While councils collected more than 96% of all council taxes, they fell short of the amount they had budgeted to be collected.

That means an extra £6.5m "hole" in local government coffers.

Steve Thomas, from the Welsh Local Government Association, said: "In terms of council tax collection our rates are as good as anywhere in the UK."

Mr Thomas, chief executive of the WLGA, said local governments were "caught between the devil and the deep blue sea".

He said: "We have to balance statutory obligations with anti-poverty initiatives. We get criticised for chasing people through the courts and issuing summons if they don't pay their council tax."

The figures from the Welsh Assembly Government show that while £1,056m was due to be collected, authorities had collected £1,018m, a gap of £38m.

The Tax Payers' Alliance accused local authorties of allowing money to "slip through their fingers at a time when public finances were under considerable strain".

A spokeswoman said: "In this case, the £38m lost through uncollected council tax might otherwise have been spent protecting frontline services or saving staff from redundancy.

'Must explore'

"Local authorities must explore low-cost, reliable ways of taking council tax payments such as direct debit or using existing facilities like libraries as 'payment centres' which is being trialled by some.

"Ultimately though, with council tax having doubled over the past 10 years it's unsurprising that many are struggling to pay."

Mr Thomas said collection rates were always subject to the economic climate.

He said: "Part of the reason for uncollected council tax is a transient population, people who lose their jobs or their benefits.

"We are also in the middle of a recession and people are struggling to pay council tax."

He added: "It financial terms £38m is a lot of money and we would like get 100% but even in the good times there were no scenarios where we were getting 100% of all tax.

"This is as good as it is going to get."

'Balancing act'

A Welsh Assembly Government spokesperson agreed that local authorities had a "difficult balancing act as they try to maintain the amount that they collect in council tax when people are finding it harder to make ends meet".

They added: "Helping people to weather the storm is a key assembly government priority.

"As part of this, last year we launched guidance to provide councils with advice on collecting council tax in the current financial climate. We have also committed £1m per year 2008-2011 to help more people claim council tax benefit."

Mr Thomas pointed out that local authorities in Wales had been tremendously consistent in terms of the amount of council tax collected.

"The introduction of direct debits has made a tremendous difference, but there are a lot of people in Wales who do not have a bank account, do not have a credit or debit card.

"And we could see people have tremendous difficulty in the coming year once cuts to things like housing benefit are introduced."