Experian’s analysis reveals £100m unpaid Council Tax owed by the most affluent sections of society
11 December 2012 - New research from Experian reveals that some of the most affluent sections of society owe millions of pounds in unpaid council tax.
Experian has analysed £170 million of outstanding council tax debt1 owed to a broad range of rural and urban local authorities across England. The analysis revealed that 17 per cent (£28 million) is owed by people from the most affluent sections of society. When applied to all outstanding council tax in England last year, (£600m), the research suggests that almost £100m is owed by the most affluent sections of society.
The affluent non-payers are found mainly in the South East of England and include wealthy people living in the most sought after neighbourhoods, middle income families living in moderate suburban semis and successful professionals living in suburban or semi-rural homes2.
The research also found that 32 per cent of Council Tax debt (£192million) is owed by people in low paid work, not claiming benefits and on the financial breadline. These include young people renting flats in high density social housing and lower income families in urban terraces across the UK3. The research also indicates that these people will struggle to pay back their council tax debt in the short or medium term.
The research also revealed that a significant number of young, well-educated city dwellers were among those least able to pay their council tax because, although over-qualified, many have taken low paid work out of financial necessity and budgets are stretched to the limit. The amount owed by these people is £124 million (20 per cent of all outstanding council tax).
1Experian has analysed £170m Council Tax debt owed by 144,000 households in local authorities across a broad mix of rural and urban areas in England.
2Of the £170m debt analysed, over £28m (16.62%) was owed by Mosaic Groups C, D and E. These Mosaic Groups are described as wealthy people living in the most sought after neighbourhoods, middle income families living in moderate suburban semis and successful professionals living in suburban or semi-rural homes. When applied to all outstanding debt last year, £600m, the research suggests that around £100m is owed by the wealthiest sections of society. This analysis does not includes uncollected council tax from previous years.
3Mosaic Groups I and N, young people renting flats in high density social housing and lower income workers in urban terraces in many diverse parts of the UK.
Simon Waller from Experian comments: “We were very surprised to see so much council tax owed by people with the probable means to pay it back. The research suggests that more tax could be collected if local authorities took a different approach to non-payers according to their financial circumstances and ability to pay.
“For the most vulnerable groups, this means ensuring people are receiving the benefits or discounts they are entitled to and, where appropriate, offering more flexible, long term payment arrangements. For those that can pay, a different approach needs to be taken such as setting up direct debit arrangements and insisting, where necessary, on more prompt payment arrangements.”
Experian is the leading global information services company, providing data and analytical tools to clients around the world. The Group helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft.
Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended 31 March 2012 was US$4.5 billion. Experian employs approximately 17,000 people in 44 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and São Paulo, Brazil.
For more information, visit http://www.experianplc.com.
Experian’s Debt Prioritisation Service
Evidence shows that better debt recovery results are achieved when actions are tailored to the circumstances of each debtor. Understanding whether a debtor is either unwilling or unable to pay a debt and tailoring the recovery action according to financial circumstance is vital to maximising revenue returns vs. recovery effort and cost.
Experian’s Debt Prioritisation Service has been designed to increase collections efficiency and maximise returns by identifying collectable revenues and informing appropriate debt recovery actions. Using a vast array of up to date and highly accurate financial data, debtors are scored according to their ability to pay. Further data enhancements are then applied where available to identify homeowners, equity held within a property, indebtedness, adverse public data, and the value of monthly financial commitments. This process improves debt recovery efficiency by identifying collectable revenues and informing the most appropriate recovery action in accordance with the debtors financial circumstances. In short this enables;
Experian has a proven track record of helping Public Sector organisations to substantially improve recovery of uncollected debts through score based assessment, data provision and tracing throughout the recoveries process.