A DEFINITION OF HARDSHIP National and local government were knowingly careless about hurting vulnerable low income debtors when they imposed austerity on their poorest fellow citizens from 2010/11

28 October 2018

Local Government Finance Bill, 24 July 2012, Volume 739


 National and local government were knowingly careless about hurting vulnerable low income debtors when they imposed austerity on their poorest fellow citizens from 2010/11

On the 24th July 2012 I was chair of the Zacchaeus 2000 Trust. The Local Government Finance Bill 2012 abolished council tax benefit and required local authorities to decided whether they would impose council tax on benefit claimants. Most of them did. We lobbied the House of Lords to include an amendment to the Bill to protect vulnerable debtors from the draconian enforcement of the council tax against the inadequate benefit incomes of the disabled and non-disabled.

Prior to the debate I had discussions with officials at the Department of Work and Pensions, the Department of Communtities and Local Government and the Minsitry of Justice about them agreeing a definition of hardship. The draft we discussed was read to Peers during the passage of the Bill by the former Bishop of Oxford, Lord Harries of Pentregarth - see below.

The amendment was withdrawn expressing hopes of continued discussion, which never happened. 

Baroness Meacher - Hansard clmn 266

94: After Clause 14, insert the following new Clause—

“Enforcement of council tax"

Councils shall include procedures in their contracts with bailiff companies covering the enforcement of council tax which allows for the return of a warrant by the bailiffs to the councils for reconsideration when—

(a) there is a mistake in the decision to issue the warrant in the first place;

(b) the warrant was imposed by the local authority before the relevant facts of the case were known;

(c) the circumstances of the defaulter have changed since the warrant was issued by the local authority;

(d) the defaulter is experiencing financial hardship and is unable to pay the tax; and(e) the circumstances of the defaulter fall within the circumstances of “vulnerable situations” on page 9 of the National Standards for Enforcement Agents issued by the Ministry of Justice in 2012.”

Lord Harries of Pentregarth - Former Bishop of Oxford. 

"My Lords, in adding my name to the amendment, I fully support everything that the noble Baroness, Lady Meacher, said, and I do not intend to repeat a single word of her speech.

I simply draw attention to subsection (d), which states that, “the defaulter is experiencing financial hardship and is unable to pay the tax”.

Obviously, that raises the question: what is meant by financial hardship and how do you define it? Are there any indicators?

As has the noble Baroness, I draw attention to the work of the Zacchaeus 2000 Trust, which has worked for more than 40 years with benefit claimants and the most vulnerable people in society, and some recent research by Brighton University on indicators which the three departments could use. Of course, people will say that they are not very precise, but we believe that they are the best that can be done, emerging from people with real experience of what financial hardship means. Those people have put forward eight indicators which, I should point out, make no distinction between disabled and non-disabled because both suffer financial hardship.


  • First, hardship happens whenever incomes in work or unemployment are too low to cover necessary expenditure; and when such circumstances are beyond the control of its victims, it impacts with great severity on both the disabled and the not disabled.
  • Secondly, necessary minimum expenditure includes food, fuel, water, clothing, transport, some personal necessities, rent, council tax, fines, insurance and pensions. Too often, as we know, choices have to be made between paying the rent, heating or eating.
  • Thirdly, necessary expenditure is increased by debts that include fines, courts, bailiff costs, liability order costs for council tax, payments of court orders, debt collectors, bank charges, the high interest to doorstep pay-day lenders and loan sharks, DWP overpayments, sanctions, civil penalties, caps and cuts. As your Lordships can see, there is quite a long list of possible debts that people at the bottom of the pile can incur before they know where they are.
  • Fourthly, debts occur due to the innocent mistakes of both welfare claimants and officials in the delivery of welfare. People then borrow to eat or to pay bills or pay off other debts. A visit to a food bank is obvious evidence of hardship.
  • Fifthly, circumstances beyond the control of welfare claimants that lead to hardship include unexpected illness, divorce or separation from a partner who leaves when debts have not been paid, a serious accident in the family, a bereavement and funeral costs, a pay cut, redundancy and unemployment, flooding, and any accidents or theft for which the claimants cannot afford insurance.
  • Sixthly, hardship leads to an inability to communicate with the authorities, courts and creditors, due to the lack of a landline phone and dependence on pay-as-you-go mobiles that run out of money when claimants run out of money—normally, on the basis of their experience, once a week.
  • Seventhly, as the noble Baroness pointed out, there are some very heart-rending cases of people running into huge debts because of mental health problems, or of such problems occurring because of all sorts of misunderstanding about the debt. The Royal College of Psychiatrists reports that 50% of people in debt have mental health problems. The figure is 50%, so, to put it the other way round, 25% of people with a diagnosed mental health condition are in debt. Those are startling figures.
  • The last indicator is that hardship exacerbates the risks of low birth-weight babies being born to women who are unable to afford a healthy diet before they conceive and while they are pregnant. As we know, the £71 a week jobseeker’s allowance is much too low to live on and, based on all sorts of very sound research, low birth-weight associated with foetal growth restriction is the strongest predictor of poor learning ability, school performance, behavioural disorders and crime.

Fraud is another area that results in hardship but I have not covered it because it is deliberate and should be rooted out. The circumstances of hardship that I have described happen because they are beyond the control of the victims. The purpose of describing these hardships, based upon the long experience of people working closely with those who are most vulnerable at the bottom of society—that is, welfare claimants and others on very low incomes—is to put them forward to assist the three departments involved in the hope that they might come together when drafting relevant laws, regulations and guidance and use some of these eight indicators to help them in that important task."

Rev Paul Nicolson - 24 May 2018. 




from the Rev Paul Nicolson