Martin Lewis: At last a chance to fix Council Tax flaws impacting millions – debt collection, difficulty challenging your band, discounts and more

"It's not often that I get to say 'the Government has listened', but it has. Many parts of the Council Tax system are broken, and I've been calling for some fixes for getting on for 20 years.

"Today, the Government is launching a consultation for England on Council Tax administration and many of the things I've long been championing for change that can affect millions of people's lives are in that consultation.

"So we have the chance of getting things done. One of my main reasons for recording this video is the Government is looking for feedback from the public. So I want to talk you through the issues, give you my thoughts on them, but also encourage you, too, to feed in to the Government consultation so you can have your say as well.

"Now, I should point out this isn't about the big picture of: 'is Council Tax the right way to do local taxation?', and how it's banded and the banding.

"It's about the administration of Council Tax. Sounds small potatoes. Isn't. Let me go through some of the things that I can now tell you I told the Deputy Prime Minister and Head of Local Government department, Angela Rayner, when I met her probably six or seven weeks ago, all of which very happy to say, are in the consultation now.

"First and most important is a campaign that I've been doing with the Money and Mental Health Policy Institute, the charity I set up to try and break the link between terrible debt problems and mental health. And Council Tax is the worst type of debt.

"Councils are allowed to collect debts in a rapid and aggressive manner that would make banks blush. Within three weeks of saying you can't make a monthly payment, they can tell you, ‘Now you have to pay us for the whole year!’ How someone who's missed a monthly payment is going to be able to pay for the year, I don't know.

"Within three weeks of that, they can go to court and get bailiffs to come and get your money with added costs on top. It is life destructive and mental health destructive for many people who simply don't have the money.

"No commercial lender would be allowed to do that. They would have to treat you fairly to look at signposting you towards getting help, and it would take, you know, getting on for a year before the bailiffs could be coming in.

"I'm delighted to say in this Government consultation they're talking about slowing down the debt collection process, adding in that councils must be considerate towards their constituents. You know, constituents treated worse than customers here, capping additional costs and pointing people towards help to pay, all of which would get rid of the terribly counterproductive and life destructive system we have at the moment.

"Councils forcing people to pay when they don't have the money doesn't bring them in cash, and it doesn't help constituents too. Many of whom go through financial catastrophe, which ends up adding to the council's costs in other ways, on the back of trying to find the funds to pay this debt and borrowing it at expensive and exorbitant rates elsewhere.

"Next one. Well, many of you will know I've long talked about the Check and Challenge Council Tax band system because in England and Scotland – though, this consultation is only for England – the band you are in is dictated by a 1991 stop gap drive-by valuation. Literally. ‘Band B', ’Band C’. And estate agents sitting next to them looking at the clipboard doing that.

"That's not in scope changing that. But what is in the consultation is making it easier to challenge your band. If you're one of the potentially 400,000 people who is in too high a band. At the moment, there's a six month rule that says if you don't get in the first six months, it gets really tough. My argument is everybody should be allowed one challenge on their property if they think it is too high a band. Remember, it can go up as well as down.

"So you need to do your research before you do so. Because to expect people to know about this in the first six months they’re in a property just simply isn't fair. That is in the consultation too. Have your say there.

"Third one. The Severe Mental Impairment – horrible name; they're looking at changing it to Significant Cognitive Impairment within the consultation – Council Tax discount is under-claimed, over-complex and under publicised.

"It's a discount for people who have dementia, Alzheimer's, severe Parkinson's, severe strokes that has impaired their social functioning. It's not talked about. Some council staff don’t know about it. And different councils operate in some different ways. Some backdate, some don't backdate. Some have a form you fill in, some have a form you have to take to your doctor, some have a form you fill in and then you have to take to the doctor.

"We need standardisation, simplification, it being universal and a less off-putting process. That's all in the consultation too.

"Now those are my three big ones. There are some other things they're talking about. They're looking at shifting the way you pay Council Tax from doing it for the first ten months of the year, and you don't pay it for a couple of months, to that you pay in 12 equal proportions. Now that seems to be sensible.

"The way that it was done for ten months was to get councils more money in at the start. But when I was first told about this, my reaction is: 'yes, but there are some people who like the ten month system because it means in the last two months they feel like they've got a payment holiday and they're able to use the money they're not spending on Council Tax to say, pay their car insurance'.

"So the proposal is the default will be shifted to 12 months. But if you want to pay by ten months, you will have a right to do so.

"They're also looking for carers and apprenticeships about upping the amount that you can earn to qualify for the Council Tax discount, because it hasn't been increased with minimum wage increases, which seems very sensible to me.

"So that's some of the highlights of what's in this consultation. There's a link at the bottom because I forgot when I'm recording this to show you where you can feed in to the consultation. And fingers crossed some of this change actually happens."