Council target debtors with ‘blanket aproach’

Edinburgh residents with council tax arrears are the targets of a new campaign by the City Council, using postcode identification, to recover debts quickly.

The Council has introduced measures which alter already agreed upon repayment schedules so that council tax arrears are paid off more quickly. Depending on where they live in the city, debtors may see their repayment rates increase dramatically.

Michael Cormack, of Edinburgh’s Coalition Against Poverty (ECAP) said: “The council try to force a large number of people, already paying off arrears in a set repayment scheme, to pay them off at a higher rate. Often jumping from a manageable amount a month to a drastically higher amount.”

Councillor Gordon Mackenzie, Finance Convener for the City of Edinburgh Council said: “This category of ‘can pay won’t pay’ people were discovered using research based upon their credit status and the area they live in, sometimes owe thousands of pounds and can clearly afford to be paying more than they are at the moment.”

The City of Edinburgh Council is not the first to introduce these measures in an attempt to collect debt and speed up the recovery of debts.

Mackenzie explained: “More than £9million is owed in council tax arrears by people who can afford to pay but have chosen not to. Sometimes people owe thousands and can clearly afford to be paying back more than they are at the moment. It is only right that moves are made to recover the debt as quickly as possible”

Postcodes are used to identify the supposed wealthiest people within the City. It is presumed that those in, for example, the Marchmont or Morningside area are wealthier and capable of meeting the increased demands in repayment of their debts.

If the repayments are not met, and their debts exceed their assets residents are at risk of being made bankrupt by the council, although so far there are no reported cases of this in the city.

ECAP, a support group for people facing financial problems, also accused the council of attempting to fix the problems with a ‘blanket approach’.

Spokesperson Michael Cormack said: “The council do not take on board people’s circumstances, they have a hard-line attitude towards them. They choose 2500 people and target them with high repayment rates. People can potentially lose their homes over this.”

The new scheme has seen some homes jump from paying off a reasonable and manageable amount to a much higher rate each month.

The council insist that the individual’s credit status is taken into account as well as their postcode, and individual’s circumstances are very important.

Mackenzie said: “Individuals who cannot pay their debt within 12 months will have their circumstances reviewed and alternative payment arrangements will be considered. Individual’s circumstances continue to be considered.”

Statistics show that in the last six months the bankruptcy rate has shot from 300 to 4000 people. The current credit crisis throughout the country suggests this figure is set to rise, it is yet to be seen whether this new policy will contribute to this increasing number.