Council tax debt is currently the number one debt issue the Citizens Advice Bureau network sees.

Analysis of figures for 2019/20 reveals that 2,257 people sought help from the Citizens Advice network with a complex debt issue involving council tax, owing a cumulative £6.8 million in council tax arrears.

A complex debt issue is where someone owes multiple debts. Worryingly, the average debt owed was over £3,000– almost three times the average council tax bill of £1,201.

The charity fears council tax debt could grow even further in 2021, as payment protections and furlough schemes end. This will force more people into reduced incomes and putting extreme pressure on household decision-making around which bills to pay, particularly council tax.

CAS has also warned that working people in Scotland will face an income shock if the £20 increase to Universal Credit is not made permanent.

In March 2020, the Chancellor announced a £20 per week increase to the value of Universal Credit. The move was a lifeline for people on the payment, but there has been no confirmation the uplift will be made permanent, leaving people facing a cut of over £1,000 per year in their incomes.

New data released by CAS reveals around one in three people who seek help from the Citizens Advice network on Universal Credit are in work.

Since April, the network issued over 6,500 pieces of advice about Universal Credit to clients who are in part-time or full-time work. 2020 also saw more homeowners than usual seek help from the CAB network with Universal Credit in addition to those in social or private sector tenancies.

Mortgage payers are not entitled to any support with housing costs until 39 weeks of claiming Universal Credit – for this group the current additional £20 a week will be making a vital contribution to covering housing costs. 28% of new CAB clients seeking help with Universal Credit are owner occupiers.

CAS is calling on people to make use of the Scottish Government’s Council Tax Reduction scheme which can help reduce future payments. For some people, it can also offer a backdate of up to six months.

CAS has an online tool for people to use to check all their council tax entitlements to savings, reductions, discounts and exemptions to help lessen the pressure on meeting council tax bills.

The charity has also recently developed a new online tool called Money Map, which allows people to round up all their options to boost incomes and cut living costs during these difficult times.

Myles Fitt, CAS financial health spokesperson, said: “Scotland is potentially facing an explosion of council tax debt in 2021. The figures before the pandemic are bad enough, but the real fear is that Covid-19 is going to make matters much worse.

“Councils across Scotland showed a real empathetic approach to those who found themselves in council tax payment difficulties, and the payment breaks in the first six months of the pandemic were extremely welcome. However this has led to arrears building up, arrears that will be difficult to meet for the many people who have during that period experienced an income drop due to unemployment or reduced working hours.

“For others, this problem is yet to come in 2021 when the economic squeeze on personal finances is felt as the furlough scheme and payment support measures close at the end of April, ironically in the same month the first payments of council tax in the new financial year are due.

“Action is required to stop council tax debt - already the number one debt issue the Citizens Advice network sees - becoming an even bigger problem next year.”

Mr Fitt added: “CAS would like to see those who have fallen into council tax debt solely because of an economic consequence of COVID-19 be given some sort of help. This could be through the Scottish Government undertaking to meet the costs of writing off such debt, the establishment of a Council Tax Hardship Fund, or through the long-term continuation of supportive forbearance by local authorities.

”CAS also supports greater awareness the Council Tax Reduction scheme which helps those struggling to meet on-going bills and which could for some provide backdated payments. That’s why CAS encourages people to check if they are entitled to council tax savings, reductions, discounts or exemptions through our online tool but also to explore other ways to boost their incomes more widely through our Money map tool.

“Finally, if people have council tax arrears or are worried about getting into council tax debt, please speak to your local Citizens Advice Bureau. Our trained advisers can assist and help stop current payment difficulties building into future problem debt.”

CAS is also calling for action to both strengthen the Universal Credit system and ensure workers get a fair deal at work through adequate wages and secure hours.

Nina Ballantyne, CAS social justice spokesperson, added: “Universal Credit is a key element of our social security system, and the decision last spring to increase the payment by £20 a week has been a lifeline for many people during the Covid-19 pandemic.

“It’s now essential it’s retained permanently, otherwise there is a real risk more people on Universal Credit will face an income crisis, unable to meet their living costs, while our shell shocked economy is still dealing with the fallout of the pandemic.

“Universal Credit should be a safety net for people on low incomes who are in and out of work, with 1 in 3 people who come to the Citizens Advice network for help with the benefit currently in work.”

She added: “Cutting the increase will remove around £1,000 per year and contribute to a crisis of in-work poverty when we need to build back better.

“We already face unacceptable levels of poverty in our society, this cut could see even more people swept under the tide. Keeping the £20 a week increase, boosting pay and delivering more secure work for people will grow the economy in a fair way.

“There is still time for the Government to keep this lifeline permanently, and give people the security of knowing that their incomes will be protected beyond March 2021.”