Jonathan Werran 06 January 2015

Poor households face council tax increases warn council leaders

English councils have been put in an ‘impossible position’ by being forced to either hike council tax bills for low-income working age residents or reduce services still further, council chiefs have stormed.

The claim follows publication today of a report by the Local Government Association into council tax support, which found in 2014/15 only 45 out of 326 English councils – 13 fewer than the previous year - have kept the same level of discount available under the old council tax benefit regime.

All householders have to make a minimum council tax payment in a total of 244 council areas, 15 more than in 2013/14, the report found and one in seven councils plan to alter their discount scheme in 2015/16.

Under previous arrangements the Department for Work and Pension centrally funded CTB. But in April 2013 such schemes were localised and subject to a 10% across the board cash reduction.

Some £3.7bn has been provided for council tax support in 2013/14 and 2014/15 – of which police received £400m - and the same funding level would be maintained for 2015/16, the DCLG has claimed.

Cllr David Sparks, chair of the LGA, said councils would need to find £1bn by 2015 to safeguard discounts for residents on low incomes – a situation he branded ‘a stretch too far’ given the need to make £20bn cutbacks across the sector.

‘Many councils have been put in an impossible position,’ Cllr Sparks said.

‘No one wants to ask those on the lowest incomes to pay more. But faced with significant cuts to the money we receive to look after the elderly, protect children, repair the roads and collect the bins, many councils have had little choice but to reduce the discount,’ Cllr Sparks added.

He urged the government to give councils the full amount of funding needed to provide council tax support, or risk residents who can least afford to pay local charges being hit with higher bills.

In response, local government minister Kris Hopkins said: ‘Spending on council tax benefit doubled during the last decade, costing taxpayers more than £4bn a year - equivalent to almost £180 a year per household.

Mr Hopkins added: ‘Welfare reform is vital to tackle the budget deficit this government inherited and our reforms to localise council tax support now give councils stronger incentives to support local firms, cut fraud, promote enterprise and get people into work.’

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