Fear over council tax bill for poor

Almost 600,000 poor families are facing a second year of above average council tax rises, according to new research.

New research suggests almost 600,000 poor families are facing a second year of above average council tax rises.
New research suggests almost 600,000 poor families are facing a second year of above average council tax rises.

The Joseph Rowntree Foundation (JRF) said 580,000 families in England will pay an average of £149 a year more than 12 months ago, having a "significant impact" on their finances.

The research group said a study of Council Tax Support, brought in last year, found that from this week 70,000 poor households will pay council tax for the first time, facing average bills of £114.

Chris Goulden, head of poverty research at JRF, said: "For a second successive year, the country's poorest families are facing big increases in council tax.

"This change to the welfare system is largely below the radar but has significant impact for families already struggling to get by on a low income. Paying this tax increase will be beyond most, pushing them into deeper hardship."

Sabrina Bushe, of the New Policy Institute, co-author of the report, said: "People previously deemed too poor to pay anything now face a hefty council tax bill. English councils have to hold a referendum if they want to put council tax up by more than 2%.

"This government policy, aimed at keeping rises down, has been a success. Now the transitional grant has gone, it is time that government offered the same protection to the poorest households."

Hilary Benn, shadow secretary of state for communities and local government, said: "It is utterly cynical for David Cameron and Nick Clegg to claim they have taken the lowest paid out of tax when over two million low-paid workers, disabled people and carers have had their council taxes forced up under this Tory-led Government."

Sharon Taylor, who chairs the Local Government Association's finance panel, said: "When government handed the responsibility for administering council tax support to local authorities, it cut hundreds of millions in funding for it.

"The shortfall between the money councils receive to fund council tax support and the money we would need to protect those on low incomes is getting bigger and is likely to reach £1 billion by 2016.

"At the same time, councils are tackling the biggest cuts in living memory and cannot afford to make up the difference.

"Local authorities are facing an impossible dilemma between asking working-aged claimants to pay more tax or taking much-needed money away from other services. Councils want to protect those on low incomes but this is being made increasingly difficult by Government cutting funding and taking some of the decisions about who receives this benefit out of our hands.

"Government should consider giving local authorities the full amount of funding needed to provide council tax support and ensure that decisions over council tax and discounts are fully localised."

Local Government Minister Brandon Lewis said: "Spending on council tax benefit doubled under the last Government, costing taxpayers £4 billion a year-equivalent to almost £180 a year per household. Welfare reform is vital to tackle the budget deficit left by the last administration.

"Our reforms to localise council tax support now give councils stronger incentives to support local firms, cut fraud, promote local enterprise and get people into work. We are ending the last administration's 'something for nothing' culture and making work pay."