CROYDON IN CRISIS: After hiking Council Tax by 15%, the Tory Mayor and his finance chief are now using ‘an in-house army of bailiffs’ to go after residents on benefits who have fallen into arrears. By STEVEN DOWNES
While Jason Perry, the £84,000 per year Tory Mayor of Croydon, is handing out cushty Town Hall jobs to his mates and hiring special “support” staff for himself and his underworked cabinet, his latest wheeze for managing the cash-strapped council’s budget is to use “an in-house army of bailiffs” to go after residents with Council Tax arrears.
At a Town Hall meeting last night, the Conservative-run council agreed to seek legal orders to have the benefits of those in arrears docked to pay their Council Tax bills.
But the leader of the Labour opposition on the council said, “The council should be improving its efforts to get hardship funding to these residents, not targeting their benefits.”
The measures approved by Croydon Tories last night will, according to their own figures, save the council around £400,000. The council, meanwhile, is spending almost £500,000 per year on allowances for Mayor Perry and his cabinet and salaries for their “support staff”.
The latest move comes months after Perry and his cabinet member for finance, Jason Cummings, hiked Council Tax by 15%, the biggest increase in the country.
And it is just a year since Mayor Perry issued a Section 114 notice, an admission that he was unable to balance the authority’s budget in 2023-2024. It was the third time in two years that Croydon had issued a S114.
With the council debts of £1.6billion, Perry’s plan for 2024-2025 is to borrow even more – another £38million from Government – while slashing front-line services by a further £31million.
And Perry still wants to increase Council Tax again next April, this time by 5%.
A (very poorly written) report presented to last night’s council cabinet meeting said, “In April 2022, the council decided… to not actively seek recovery of Council Tax for residents who are in receipt of council tax support. Further exacerbating the potential for residents to unknowingly fall into debt that could become unmanageable.
“Given the current financial state of the council and the levels of budget deficits it is facing, this option is now not financially viable. The council must do everything within its power to collect as much Council Tax as possible to become a financially sustainable council in the future.”
The council says there are approximately 26,342 household that are currently excluded from recovery, and that there’s £3.6million in accumulated, uncollected tax. The report does put this into some kind of context, saying that this is just 1% of the total amount of Council Tax collectable in 2023-2024 (£311million).
The council report shows that from 50 households in arrears with their Council Tax in 2017, this grew to 876 in 2020, quadrupling in 2021 to 2,593 and then more than doubling to 5,669 in 2022.
It’s reasonable to assume that with Perry’s 15% Council Tax hike this year, and a significant reduction in the amount of Council Tax relief being provided in Croydon, the numbers in arrears in 2023 may have ballooned even further, prompting the Tories to send in the heavies.
The recovery process will see poor people in debt hit with further additional costs.
A resident will first be sent a bill with set instalments. If the resident does not meet their instalments, then a reminder will be sent asking them to bring their account up to date before further action is taken.
“If the resident does not act,” the council says, “then a summons will be issued, this has a current cost of £117.50.
“Once the summons has been issued if the balance is not settled before the hearing date, a liability order will be granted at a current cost of £15.00 and a current court processing fee of £0.50 will be incurred.”
Once a liability order has been granted the council can then delve into a person’s private financial details, including employment status and employer details. They can snatch money directly from someone’s wages using an “Attachment of Earnings Order”, or divert money from their benefits, and they can send in the bailiffs to seize property for it to be flogged off to pay the debt.
The “benefit attachment” orders require the Department for Work and Pensions to pay a percentage of a claimant’s Universal Credit towards the debt. The council estimates this could help recover around £400,000 in the next 12 months by requesting up to 200 orders a month.
The Tory council’s move has caused serious concern among those working with the poor and vulnerable in Croydon.
“For an individual aged 25 and above who is receiving Universal Credit, the monthly deduction for a Council Tax debt would amount to £18.43,” Roni Marsh, the money and cost of living team manager at the South-West London Law Centre told Inside Croydon.
“While this figure may appear modest, it is a significant portion of Universal Credit recipients already rely on as a basic subsistence allowance. This additional deduction further impacts their financial resources allocated for essential necessities such as food and utilities.”
And Jane Nicholl, of the South Norwood Tourist Board, a community organisation that has worked closely with many council tenants, including those living in Regina Road, said, “This is social cleansing at its worst. Waging a war on the poor due to the poverty the council themselves initiated with their massive 15% Council Tax increase is obscene.
“The Tories are punishing the most vulnerable in the community. Mayor Perry is the unacceptable beetroot face of capitalism.
“The working class in Croydon have been shat on, first by Labour and now by this shower of rightwing buffoons who care only for the residents of Tudorbethan mansions with swimming pools. The Tory social cleansers are invading every walk of working-class life and need to be stopped.”
At last night’s cabinet meeting, Croydon Labour sought absolute undertakings from Mayor Perry that “his new in-house army of bailiffs will deal with residents in arrears with respect and dignity”.
The Tories say that they will seek to come to an arrangement with those in arrears before seeking any deductions from benefits. They say that those affected will be helped with a £2million support fund and debt support.
Councillor Stuart King, the leader of the Town Hall Labour group, said, “We are very concerned by these proposals to start sanctioning residents’ benefits, in particular given we are in a cost of living crisis that is just as hard hitting for our residents as covid was.
“The council should be improving its efforts to get hardship funding to these residents, not targeting their benefits.”
Read more: Town Hall staff braced for £31m more cuts and job losses
Read more: ‘There is no solution in sight’ warns council’s finance chief
Read more: Here’s the Mayor and 33 Croydon Tory councillors who THREE times voted in favour of hitting you with a 15% Council Tax hike
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