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


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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 969.

    Democracy carries within it the seed to its own destruction.

  • rate this

    Comment number 968.

    All people especially the benefit claimants will be overjoyed when Labour win next, free money, free housing, free everything. People who don't wish to work will be living exactly how they want. No bills at all, wonderful isn't it. Unfortunately the IMF will take over the running of our country in the same way as they did in the 70's. We will make Greece look like the wealthiest country in Europe

  • rate this

    Comment number 967.

    945 If I misquoted him then the Guardian has. The context was "we messed up spending last time round and people didn't vote for us". Ah, yes, Labour isn't Socialist. So who do you identify with? - Socialist Workers Party - how's the scandal going? -

  • rate this

    Comment number 966.

    Yet another Condem lie is thier claim 'to ending the something for nothing culture'.
    They are handing billions in tax cuts to the Rich for nothing, but pure ideology.

    The something for nothing culture for sure goes on with the Condems Rich friends. They always get something for nothing....they dont even have to ask for it!

    This is pure class hatred and war waged on the poor.

  • rate this

    Comment number 965.

    My girlfriend and I live in a small flat which is in band A, we have no children and struggle to pay the full rate of council tax because we both work full time. Why should single mothers get a discount on council tax because of the lifestyle choices they have made, there is NO benefits to people who work full time and get on with it. I have no sympathy for them.

  • rate this

    Comment number 964.

    The tories Poll Tax 11(The Return)

  • rate this

    Comment number 963.

    Check out other pensioners comments - working and saving all lives yet still paying council tax and income tax

  • rate this

    Comment number 962.

    The pauper turkeys who voted for Tory Christmas still don't seem to get it: they want you back to Downton Abbey full stop. They just fill your uneducated brain with anti-EU cheap tabloid patriotism while keep turning the screw until you are back to the Abbey. They need servants with no rights, no money, no NHS, no houses to go back to. They want you in the basement with your mouth shut. Get it.

  • rate this

    Comment number 961.

    Before any1 attacks me. I work, always have done and dont claim a penny in benefits! The price increases for C/Tax, Petrol, energy, food & EVERYTHING else is going to cripple me and my boyf who also works. We rent and pay through our nose to keep a roof over our heads but the lack of housing available means we have no choice but to stay where we are. The alternative is to go our seperate ways!

  • rate this

    Comment number 960.

    I pay massive council tax for a modest house but get nothing except bins emptied - then it's extra for garden waste. It's more than my food and energy bills combined. I don't whine about it - I pay it. Whilst there are those who clearly need and deserve to get benefits there are also those who gloat about what they get away with. It's time some govt, any govt, got to grips with the difference

  • rate this

    Comment number 959.

    We are going to be bankrupt if this happens. My wife works part time, I am a full time student because I couldnt get a job so spent savings to pay for the MA. We do get working tax credit and a slight reduction for being a student. We worry if our daughter is invited to a birthday party and needs a present and struggle to buy her clothes. We have less than £20 left every month. Scary times.

  • rate this

    Comment number 958.

    860.Have your say Rejected
    "The Tōraidhe and their liberal lapdogs must be having a field day, the whole of the nation hates each other, divide and conquer."

    Labour's politics of envy are as divisive.

    Having said that, it seems to me ridiculous that people living in a house worth millions should pay the the same as someone's whose house is worth £320,000.

  • rate this

    Comment number 957.

    I suppose I will have to pay the full extra council tax despite being on a low private pension. it will mean I won't be able to pay for new glasses, dental costs and housing repairs. Why? because I was foolish enough to work for my living, buy my own house, save for my retirement and not claim benefits or live in Wales.

  • rate this

    Comment number 956.

    Also I think Winter Fuel Allowance needs to be put on bills as credit or put onto gas/elec key meters as credit, that way the elderly won't be cold and stop spending it on things like tv's , holidays etc!

  • rate this

    Comment number 955.

    Wrong, this is the first govt that seem to stand up for the working man/woman. Not constantly thinking the state should constantly handout money left right and centre. If you cant work ie you are disabled the state will support you with DLA/PIP. If you can work stop moaning and get job hunting.

  • Comment number 954.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 953.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 952.

    All this user's posts have been removed.Why?

  • rate this

    Comment number 951.

    I understand the dilemma.

    But I feel in a free society, laws should protect Life, Liberty, and Property. They must not violate these. Any laws that do this should be abolished.
    Fore example, a free society would abolish laws which implemented:
    Income tax (violates property).
    National service (violates liberty).
    Marriage laws (violates right to your life).


  • rate this

    Comment number 950.

    771.DSA - all I get for my council tax is my bin emptied one a fortnight.
    And local police presence..and Fire Brigade...and street lighting...and street cleaning...and the upkeep of public buildings...


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