Dan Peters 27 May 2014

Council tax debt increasing problem after localisation

Council tax arrears is now the biggest debt problem reported to Citizens Advice.

New figures have revealed between January and March one in five people reporting debt problems to the charity had a council tax arrears issue.

In the first three months of this year 27,000 people with a council tax arrears problem got help from Citizens Advice – a 17% increase on the same period last year.

Chief executive of the charity Gillian Guy said: ‘For some households council tax bills can be the tipping point that plunges them into debt. Last year more than 90,000 people came to Citizens Advice looking for help with council tax arrears as they struggle in the face of low incomes, rising prices and reduced financial support.

‘Consumer debts like credit cards and personal loans have traditionally been the most common debt problems that come through our doors, but since the end of council tax benefit we’ve seen council tax arrears problems go through the roof.

‘As their budgets shrink, local authorities are increasingly stretched, but they must ensure that the resources available for their local council tax support scheme are focussed on those who are most in need.’

Labour MPs have called for the Government’s independent review of the localisation of council tax support – planned before April 2016 – to be brought forward.

Stockton North’s Labour MP Alex Cunningham said the policy was ‘hitting the most vulnerable in our society’.

Shadow minister for work and pensions, Kate Green, added: ‘My colleagues have pointed out an unevenness around the country in the kind of support that people receive from their local authority and I am concerned about that too.

‘We have a postcode lottery.

‘No one is against the sensible localising of decisions, but postcode lotteries that leave families in some parts of the country at greater risk of poverty cannot be the kind of welfare support that we want.

‘The policy is not working for some of the poorest families in our constituencies.

‘Ministers owe such families a duty of care and protection and it is not acceptable for them to wash their hands and pass the problem down to local authorities that have little choice in how they can administer the system.’

Opposition whip Julie Hilling said: ‘This policy has been yet another for which the Government has attempted to devolve blame.’

But Conservative MP for Brigg and Goole, Andrew Percy, hit back: ‘I voted against the bedroom tax so I am not a fan of all the changes, but this attempt to present the financial challenge that local government faces as a wicked Tory attempt to attack poor people is truly shameless.

‘Opposition members are not interested in having a sensible debate on the matter.

‘All they are interested in is a dirty, filthy little political campaign that is all about trying to label anybody who disagrees with them as somehow not caring.

‘It is ridiculous and the public is seeing through it.’

Local government minister Brandon Lewis added: ‘As council tax is a local tax, we believe that it makes sense for councils to have power and responsibility for making decisions about the levels of reduction to be granted to low-income, working-age claimants - their residents - and for providing the required support.

‘The policy is now embedded, and councils have experience in designing and operating local schemes.

‘Our reforms to localised council tax support are delivering national and local benefits.

‘The programme is delivering a 10% saving on the forecast council tax benefit expenditure from 2013-14.

‘We must be clear about that and we should remember that it is an important contribution to the Government’s vital programme of deficit reduction.

‘In 2013-14 the saving equates to £414m, which is not a sum to be sniffed at. ‘Despite the previous Government’s profligacy with money, we believe those sums are important in reducing the deficit.’

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