'Millions of low-income households' face council tax rise


Brandon Lewis: ''The best thing for councils is to put work programmes into place to get people into jobs''

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Millions of the poorest households face council tax rises because most councils in England will pass on a 10% benefit funding cut, research suggests.

A typical bill will rise from April by between £100 and £250 a year, but some could rise as much as £600, the Resolution Foundation think tank says.

Its report coincides with the deadline for local authorities to submit their plans for changing council tax benefit.

Councils say they have not been given enough freedom to manage the changes.

Responsibility for the benefit is being moved from the government to councils.

At the same time, the total spent on the benefit, which is to become known as council tax support, is being cut by 10%.

In Wales, the cut is being absorbed by the government, and not passed on to local authorities.

'Poll tax'

In Scotland, the cost is being shared between councils and the Scottish government, maintaining support for low-income residents.


There is a wider, highly charged, political context to this issue.

Ministers present themselves as being on the side of those who want to "work hard and get on". They say they are ending the "something-for-nothing culture".

They emphasise that more money is currently spent on benefits than on defence, education and health combined.

While delivering their tough - and they believe popular - rhetoric, ministers do not accept any blame if the poorest are hit the hardest.

The view from government is that there is no need for councils to ask the lowest income households for money. Instead they should find more efficient ways of operating, protect the vulnerable and deliver better value for money for all council tax payers.

Many councils accuse ministers of devolving responsibility for a hugely controversial cut.

The political heat on this has been rising in recent days in council chambers across England.

What seems at first to be an obscure, rather technical, debate about how a benefit is distributed, could soon emerge as a critical issue in the battle over welfare.

But the 326 councils in England could be left with a shortfall if they intend to maintain the level of existing payments.

Some are finding savings from elsewhere in their budgets, in order to protect the incomes of the poorest households.

At least 40 local authorities have decided to maintain current levels of support. Durham County Council and Tower Hamlets are amongst those which will absorb the costs of CTS into their budgets.

The government has also put forward £100m of support for those councils that limit the council tax increase for those on benefits or low pay to 8.5%.

Ministers say the total paid out in council tax benefit doubled under the last government and welfare "reform" is vital to tackle the budget deficit.

They say the changes will give councils the incentive to help people off benefits and into work.

Council tax benefit is currently claimed by about five million households in England - about half get 100% support, meaning they currently pay no council tax at all.

But the Resolution Foundation, a not-for-profit research and policy organisation which says its goal is to improve outcomes for people on low and modest incomes, says that three-quarters of authorities in England are planning to demand a new or higher payment from the lowest income households.

Council tax support changes

Council tax support (CTS) will replace council tax benefit (CTB) in April

Councils will decide who qualifies for CTS, rather than the government, as under CTB

Councils will have 10% less money to fund CTS, changes that will save £500m a year

Pensioners will be protected and households in Wales and Scotland are unaffected

This comes at a time when other benefits may also rise more slowly than the cost of living, and the government introduces an overall cap on benefits.

Because pensioners are fully protected, those of working age are, in many areas, being asked to shoulder a much greater burden.

"Millions of England's poorest households, both in and out of work, are already very close to the edge," said Gavin Kelly of the Resolution Foundation. "They are going to find it very hard to cope."

Some campaigners have likened the change to the "poll tax", in that people are asked for a contribution regardless of their ability to pay.

For Labour, shadow communities secretary Hilary Benn said: "All over the country, people on very low incomes will be asked to pay sums of money they simply cannot afford, just like the hated poll tax."

'Low priority'

Many in local government fear that councils will be left with a financial black hole, as the cost of pursuing those who do not pay through the courts could be higher than the revenue the authorities will raise from them in tax.

Sir Merrick Cockell of the Local Government Association said the lowest paid are going to be in ''a very difficult place''

Peter Fleming from the Local Government Association, which represents local authorities, told BBC Radio 5 Live the government had not given councils enough control over the scope of cuts they could pass on.

"The problem is we've been handed the cut, but not given the flexibility to design schemes... that would have actually protected the people who are most vulnerable.

"Give us the freedoms and flexibilities to actually devise the schemes that work best for the communities that we serve," he added.

He also predicted there would now "be people who are literally unable to pay" their taxes, and the "difficulty for us as local authorities is do we take people to court for very small amounts of money?"

'Right to communities'

Local Government Minister Brandon Lewis told BBC Radio 4's The World At One that the author of the report was an adviser to the Labour Party and therefore viewed the issue "through a particular lens".

He said councils had the freedom and flexibility to develop their own schemes and ministers had urged them to be "sensible" about their collection policies so "they don't spend money collecting very, very small amounts of money".

"That comes back to linking in very carefully about the point we have made about protecting the vulnerable," he said.

He urged councils to continue to try and find savings in related areas by cracking down on the £2bn in uncollected council tax and the £200m lost to fraud and error every year.

He also rejected comparisons with the poll tax, saying "we have moved on somewhat with the system since then".

Graph showing potential increases in council tax payments for those receiving benefits under new council tax support schemes
Example of increase in annual payments for 'band B' house
Council scheme* Single adult (Part-time), no children Single parent (Part-time) with children Single parent (full-time) with children in childcare Single parent (part-time) with children in childcare Couple (one full-time earner) with children

Type 1






Type 2






Type 3






*The effect of new council tax support schemes was analysed by the Resolution Foundation and placed in four categories: type 1 (no change), type 2 (moderate increase), type 3 (large increase) and type 4 (severe increase). An explanation of their method is available here: http://www.resolutionfoundation.org/media/media/downloads/No_Clear_Benefit.pdf


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  • rate this

    Comment number 789.

    I cannot understand how anybody cannot see the link between the riots of 2011 and the fact that we have a Conservative government in office. You can delete the post but the fact remains that if you keep kicking people while they're down, they are going to kick back. This costs more in the long run. As for paying council tax, I pay all tax, but I'm too well educated to vote Conservative.

  • rate this

    Comment number 788.


    So you're saying someone who has been working for all of their lives, being suddenly made redundant and thanks to the recession can no longer find work in their area or afford to move... is someone who deserves to be in squalor and poverty? Just because you feel they scrounge?

    Some of you people I swear.... you'll be singing a different song if it ever happened to you.

  • rate this

    Comment number 787.

    with the bedroom tax and now council tax and soon universal credit i think this government are trying to make the buy to let landlord extinct . watch the price of your houses fall then .the market will be flooded with propertys that landlords can no longer make a profit on via housing benefit and want to sell up ...every cloud has a silver lining

  • rate this

    Comment number 786.

    "We are a long way from robots and automation being able to perform even basic healthcare tasks."
    It's already here:

    How do u justify having multiple BBC accounts (comments 755, 745 are only 2 minutes apart)?
    Is it safe to say an insecurity is revealed by doing this?

  • rate this

    Comment number 785.

    Democracy is mob rule.
    If you're advocating anarachy then I would suggest that the resulting carnage will result in those with an excess of wealth and property being the biggest casualties.

    And of course history had shown that those with an obsession with personal wealth and property, at the expense of the welfare of their fellow citizens, tend to come to bloody end...

  • rate this

    Comment number 784.

    The last government created a culture of dependency clients of the state wholly dependent on state assistance in every aspect of their lives for as long as they want

    Changing this culture is very hard Giving money is easy, taking money away is harder but has to be done because underlying this dependency is unfairness to those who do work & struggle often on less than some receive on benefits

  • rate this

    Comment number 783.

  • rate this

    Comment number 782.

    746. Rodders AKA Dave

    I called it a political process to organise society. If you look at Bastiat's alternative nirvana all but a minimal set of laws and state functions are removed and "magically" we will all negotiate with one another to organise ourselves and economic activity to our mutual benefit. Flawed though our democracy is, Bastiat has no examples of that ever working in practice.

  • rate this

    Comment number 781.

    I'm very concerned about people on benefits being told to tighten their belts for the common - their belts are already tight enough. I also don't like the dishonest way this has been done - passing on the responsibility for it so that, if there are cuts to benefits, local councils are going to look like the bad guys. Not to be alarmist but I won't be surprised if there's social unrest soon.

  • rate this

    Comment number 780.

    Who audits the councils spending ?. I cant see anyone who does this they seem to be a closed unit and only answer to themselves.

  • rate this

    Comment number 779.

    Democracy is mob rule. When 51% can, and do, take away the rights of the remaining 49% that is tyranny.
    No, mob rule is mob rule.
    Democracy is the people working together for a better future.

    The biggest problem is lack of education/information to have an informed opinion.

  • rate this

    Comment number 778.

    The squeeze on the poor will help pay for state benefits being given to Cameron's rich friends getting massive bonuses on top of soon to be tax cuts
    This uncivilized government is redistributing wealth from poor to rich.

    Millions of Brits fear Cameron and Clegg rather than these Islamists.

    Lib dems are just as extremist. You just tear up your values.

  • rate this

    Comment number 777.

    @761 - because then you'll have a crimewave at a time when Dave is cutting police numbers and not building any more prisons. We need economic growth and genuine job creation, then you can move people off benefits, rather than the Mickey Mouse schemes doing the rounds at the moment, which are just re-hashes of the previous Mickey Mouse schemes thought up by the same civil servants and politicians!

  • rate this

    Comment number 776.


    I was responding to the vile lie that Labour spent far more than the Tories, taking GDP into account no they didn't, do try and keep up.

    Plus Labour did not have the luxury of selling off everything that was not nailed down to fund tax cuts for the richest unlike Thatcher who did.

    Tax cuts for the rich now coming out of the pockets of the poorest in our society.

    Vile Tories.

  • rate this

    Comment number 775.

    A lot of people on here seem to think that they are propping up large swathes of people on welfare. Ask yourself, why are people on welfare? It's because people cannot live on the wages that they're given. In that case, you are propping up large companies who do not want to pay their workers an adequate wage, turn your anger to the likes of Tesco, Starbucks.... the people really causing the issue.

  • rate this

    Comment number 774.

    The stats show that single persons with no children and working part-time will be least affected by these changes.

    So tell me. In what way do these changes NOT encourage landlords to have immigrants bedding down in bathrooms, garages and garden sheds?

    Anyone who thinks this will decrease welfarism is a complete idiot. It will merely displace working families and replace them with EU migrants.

  • rate this

    Comment number 773.

    " Bastiat
    According to you, not allowing women to drive, or have public positions, was moral because the only male voting population didn't pass laws allowing it."

    Strawman. When did I ever say that? On the assumption I mean democracy according to universal suffrage without qualifications and there are constitutional rights, what is your alternative model that doesn't concentrate power?

  • rate this

    Comment number 772.

    "743.Some Lingering Fog

    Only in the UK can we have an annual welfare bill of over two hundred billion pounds and people think it still isn't enough to cater for everyone's needs."

    The vast majority of which is paid to the retired and those in low paid work. Pensioners are only getting what they paid in for, and for 50% business pays too little to live. You are shouting at the wrong people.

  • rate this

    Comment number 771.

    I don't use buses, I don't claim benefits, I don't need a social worker, I don't need a translation or any other service, all I get for my council tax is my bin emptied one a fortnight.
    Value for money? I think not.


  • rate this

    Comment number 770.

    Bye bye then frothing mega lefties, just remember if a thread is this overwhelmingly in support of cuts to the free house fund, even on the BBC, high priest of big state, high tax, licence fee and expense account living, then people have had enough. We won't be milked any more!


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