MS, Cabinet Secretary for
Finance and Welsh Language: While the height of the
cost-of-living crisis is thankfully behind us, many people in
Wales are still experiencing financial problems and have
persistent debts. The Welsh Government has always sought to
support and help people, with a wide range of policies and
schemes which put money back in their pockets to help them pay
for the everyday essentials.
I am today launching an experimental exercise to help people with
council tax debt, which will help them repay what they owe while
also improving their future financial resilience. This trial
builds on previous important work in this area, including ending
prison sentences for non-payment of council tax and establishing
a best practice Protocol for the collection
of council tax debt in partnership with Welsh councils.
This new Council Tax Debt Rescue Scheme will be offered by Smart
Money Cymru Credit Union and Merthyr Credit Union for people
living in Merthyr Tydfil, Newport and Blaenau Gwent. The pilot is
being run in these areas initially because of the patterns of
council tax arrears and the location of the credit union hubs,
which will administer the scheme. If successful following
monitoring and evaluation, it may be extended to other parts of
Wales.
The scheme is designed for people in council tax arrears who are
in financial hardship and who would otherwise be at risk of using
either high-interest payday lenders or illegal money lenders to
make ends meet. Under the scheme they will be offered bespoke
assistance and affordable interest-free payment plans to help
them to both repay the council tax debt and to begin to build
savings at the same time. The Welsh Government will support
credit unions to provide plans which will be available initially
to tackle up to £2,000 of council tax arrears over a maximum
pay-back period of two years. I anticipate the pilot phase will
run until March 2026.
Credit unions are ideally placed to work with people and families
to help improve their financial resilience over the longer term,
to help them improve their credit scores and to build savings
while working to clear their council tax debt. They are regulated
by the Financial Conduct Authority to provide bespoke
affordability assessments, which consider personal circumstances
in a tailored way, and they will be able to assess people's
suitability for an interest-free payment plan while managing
their current and future housing costs.
Local councils work hard to offer a range of flexible ways for
people to pay their council tax and these will continue. But some
people who are in financial hardship may need more help, and I am
keen to explore new ways. This initiative will be available from
1 May onwards.
People should engage with their council as early as possible if
they are struggling to pay their council tax bill, and check if
other help is available, such as any unclaimed discounts or
support for low-income households through the Council Tax
Reduction Scheme – more information is available
at: Pay less Council Tax:
eligibility checker. Free advice is also available
from Advicelink Cymru.
