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Official figures show Croydon’s £90.8m in unpaid Council Tax

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Croydon households owe £90.8million in unpaid Council Tax, the second-highest level in London, in what reports say is another indication of the cost-of-living crisis.

It is also another sign of cash-strapped Croydon’s poor administration, with an increasing rate of non-collection.

According to figures from the Ministry for Housing, Communities and Local Government, the amount owed to local authorities across England now stands at £6.6billion, with 1.8million residents in arrears.

Londoners owe a total of £1.4billion in unpaid Council Tax – up 11% in a year. Boroughs including Brent (£92.2million), Croydon and Hackney (£79.6million) have some of the biggest Council Tax debt arrears in the country.

Croydon’s soaring rate of unpaid Council Tax comes after Tory Mayor Jason Perry hiked the domestic levy by 27% in two years. A typical Band D property in Croydon is now expected to pay £2,480.48 per year in Council Tax – the second highest in all London (only Kingston levies higher rates of Council Tax).

Last month, local government minister Jim McMahon announced that the MHCLG is “minded” to send in Commissioners to take over the running of Croydon Council, following a highly critical report from the improvement and assurance panel which had been overseeing the council’s management for five years.

Croydon has accumulated debts of £1.4billion, and struggles to meet its repayments and interest payments on those (mostly) government loans. Earlier this year, the government agreed to provide another bail-out loan to Croydon, this time £136million, more than anything granted to the borough before.

At the government’s Spending Review last month, it was made clear that local authorities around the country will be expected to increase Council Tax by the maximum allowed, 4.99%, in April 2026 towards to increasing costs of meeting their statutory duties over housing, adult social care and children’s services.

Failure to collect Council Tax is not a new problem in Croydon.

Back in 2012, when the council’s then financial director, Nathan Elvery, was boasting that “efficiency is in our DNA”, the amount of uncollected Council Tax was up by 17% on the previous year. Croydon then was the fifth worse in the country and second worst in London for levels of uncollected tax – but then the amount missing from the payments side of the Town Hall ledger was £42.2million, a little less than half of the 2025 figure.

Households can become liable for their full annual Council Tax bill if they miss just one monthly payment, which often results in a quick escalation to bailiff action. This Draconian action has prompted calls for a change in the law.

In the (deep) red: The Standard’s map showing the boroughs with the highest levels of uncollected Council Tax

“The vast majority of those in arrears are not refusing to pay – they’re simply unable to, often due to poor health, job loss or other negative life shocks,” according to Matthew Greenwood of the Centre for Social Justice.

“Under the current rules, missing just one payment can make someone liable for the entire year’s bill within weeks, triggering bailiff action and, in some cases, threat of imprisonment.

“It’s an outdated, punitive system that fails to distinguish between those who won’t pay and those who genuinely can’t.”

National Debtline, an independent debt advice service, says that 1-in-4 callers to its helpline have Council Tax debt, averaging almost £2,000 per person.

Research found that 390,000 Londoners were behind on their Council Tax bills in March. Steve Vaid, the chief executive at Money Advice Trust, the charity that runs National Debtline and which commissioned the research, told The Standard, “Unless changes are made at a policy level, arrears are likely to keep climbing.

“We’re calling for improved collection practices, as well as greater investment in Council Tax support schemes, to prevent people falling behind in the first place.

“Arrears levels of this magnitude underline the need for urgent action across London.

“Councils have a vital role in helping residents with unmanageable bills and to ensure Council Tax – crucial to funding local services – is collected in a way that is fair and affordable.”

Read more: Council’s agency staff bill includes £726 per hour consultant
Read more: Council accused of cover-up over multi-million agency spend
Read more: McMahon acts after serious concerns on ‘aspects of leadership’
Read more: Damning verdict on Croydon’s ‘inadequate’ children’s service

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