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9 April 2019, 06:37
Almost 700,000 Scots have problem debts or are at risk of having them, a new report has revealed.
The impact on the public purse is about £750 million, according to debt advisory charity StepChange Scotland.
It helped more than 30,000 people who were struggling with money issues last year.
With almost half (46%) of those seeking help struggling with council tax arrears, it called on local authorities to ensure they have "sustainable arrangements" that give people a "fair chance" to repay their debt.
It also recommended the Scottish Government task a minister with coordinating and developing a "high impact action plan to address the crisis that is blighting many lives and businesses across Scotland".
StepChange made the plea after the Scotland in the Red report for 2018 showed the average amount of money those who came forward for help had after paying housing, heating and council tax was just £12.64 a month.
Sharon Bell, head of StepChange Scotland, said she was "increasingly alarmed by the increases in the proportion of our clients who are struggling with household bills, particularly council tax".
Research by the charity "shows that our clients in Scotland are significantly more likely to have council tax arrears compared to elsewhere in the UK", she added.
StepChange Scotland said the average amount of council tax arrears its clients had was £2,017.
The Scotland in the Red report stated "We believe there are nearly 700,000 people in Scotland at risk of or in problem debt."
It added this was "primarily a symptom of poverty, poor housing conditions, welfare cuts, ill-health and insecure work".
The social cost of problem debt amounts to about £750 million, it said, with public services having to deal with mental health problems caused and exacerbated by debt, and demand for housing help.
StepChange is also calling for more work to be done to encourage people with money problems to seek help earlier, saying : "Stigma is still a big problem and organisations working with the public should reiterate that anyone can find themselves in difficulty."
Ms Bell said: "The vast majority of StepChange clients are in problem debt due to circumstances they could not have prevented or planned for, such as unemployment, ill-health or reductions in income.
"We are seeing a record level of demand for help with problem debt with over a third of our clients having an additional vulnerability, such as illness.
"We need more signposting to free debt advice, as the earlier someone gets debt advice the greater their options may be and the less harm they could experience."
A spokesman for the local government organisation Cosla said: "Scotland's councils take this issue very seriously and do all that they can to help people who find themselves in arrears.
"All councils will have plans and procedures in place to help people with their arrears."
A Scottish Government spokeswoman said: "Between 2013/14 and the end of 2018/19, we provided over £1.4 billion to local authorities for the Council Tax Reduction Scheme, assisting almost half a million households each year to meet their council tax.
"In 2018-19 we invested over £125 million to mitigate the worst impacts of welfare reforms and to protect those on low incomes.
"However, we cannot fill the £3.7 billion which will be cut from annual social security spending in Scotland by 2020/21 as a result of UK Government cuts.
"After nine years of the fully funded Council Tax freeze, from 2017-18 we capped annual council tax increases.
"Consequently, the average Council Tax increase in Scotland for 2019-20 is 3.6%, compared to 4.7% in England and 6.6% in Wales."