Laura Sharman 29 January 2019

Cuts to council tax support have created ‘sizeable’ increase in arrears

Cuts to council tax support have created ‘sizeable’ increase in arrears image

Cuts to council tax support (CTS) have led to a surge in unpaid tax, new research from the Institute for Fiscal Studies has revealed.

In a new report, the IFS found most local authorities have chosen to implement CTS schemes that are less generous that the council tax benefit they were replacing.

This includes the introduction of minimum council tax payments, with almost a quarter of council requiring a 20% minimum payment in 2018–19.

It found more deprived and Labour councils were more likely to introduce minimum payments as they had received larger cuts to CTS funding from the Government.

However, it estimates that around a quarter of the extra council tax now owed by low-income households has not been collected in the year it is due – a figure that is ten times higher than the typical rate of council tax non-collection.

The report states: ‘These difficulties in collecting the extra tax appear to be long-lasting: we estimate that councils failed to collect a quarter of the additional liabilities created by minimum payments in 2017–18 even when the minimum payment had been in place since 2013–14.’

Council leaders said CTS schemes were no longer fully funded by the Government with almost £2bn removed between 2013 and 2020.

'No one wants to ask those on the lowest incomes to pay more but this has put councils in an impossible position,' said Cllr Richard Watts, chair of the Local Government Association’s Resources Board.

He added: 'Councils have worked hard to try and protect discounts as much as possible but the Spending Review needs to ensure councils have the full amount of funding required to provide council tax support to those who need it. Otherwise, it is almost inevitable that bills will continue to be forced up for those who can least afford to pay.'

In competition with the PWLB image

In competition with the PWLB

Christian Wall considers what alternative funding channels are available to local authorities beyond the Public Works Loan Board.
Avoiding the precipice image

Avoiding the precipice

As councils seek ways to meet the funding gap, Martin Reeves and Rob Whiteman look at the implications for the future of public services and how we need a mature debate on prevention, accountability and joined up services.
Highways jobs

Civil Enforcement Officer

Chelmsford City Council
Grade 4 - Starting at £20,415 per annum and rising to £21,777
This role will require you to assist with the safe and free flow of traffic by patrolling on foot and / or mobile controlled parking areas and issu... Chelmsford, Essex
Recuriter: Chelmsford City Council

Administrative Support Officer - Conservative Group

Brent Council
£29,241 - £30,711 (pro rata)
This post will provide efficient, effective and flexible support to members of the Conservative Opposition Group... Brentford (City/Town), London (Greater)
Recuriter: Brent Council

Chair

Cornwall Investment Delivery Company
Remuneration commensurate with the challenge
We are looking for a Chair to establish the new company, oversee the development of its strategy. Truro, Cornwall
Recuriter: Cornwall Investment Delivery Company

Managing Director

Cornwall Investment Delivery Company
Remuneration commensurate with the challenge
Looking for someone with a strong development background, real commercial credentials. Truro, Cornwall
Recuriter: Cornwall Investment Delivery Company

Non-Executive Directors

Cornwall Investment Delivery Company
Remuneration commensurate with the challenge
Looking for Non-Executive Directors who will bring their commercial experience and skills to this new company’s dynamic. Truro, Cornwall
Recuriter: Cornwall Investment Delivery Company

Local Government News

Latest issue - Local Goverrnemnt News

The December issue of Local Government News looks at the consequences a council may face if it is unable to provide statutory services, the launch of Liverpool’s housing company and how councils can best manage roles in local authority companies.

It also has a special section on green building and energy efficiency including what funding is available to enable councils to deliver heat networks and how councils can pay for ‘smart buildings’.

Register for your free magazine