Local authorities reduce council tax support

Research today by the New Policy Institute (NPI) shows that many councils are asking lower-income, working-age tenants to contribute more towards their council tax liability, in order to ease pressured budgets.

The figures, based on information supplied by councils under the Freedom of Information Act (FOIA), show 340,000 claimants are seeing a council tax support reduction in 2016/17.

In total, NPI said 2.2 million low-income families pay an average £169 per year more in council tax than they would under the former council tax benefit system, which was abolished in 2013.

The previous coalition government scrapped council tax benefit and replaced it with a non-ringfenced grant covering around 90% of the cost. Councils now have to design their own Council Tax Support scheme, but cannot reduce benefit for pensioners.

Theo Barry Born, researcher at the NPI, said: “These tax increases for the poorest look set to continue in future years as councils seek to manage further falls in central government funding.”

The highest increase in percentage point terms in 2016/17 was Kettering Borough Council, which now asks for claimants to pay 45% of their council tax benefit, up from 25% the previous year, equating to an extra £383 a year.

Several councils, including Wandsworth Council in London, are asking for minimum payments for the first time. Wandsworth increased their minimum payment from 0% to 30%, leading to an estimated £148 a year cost to claimants. A spokesperson said it is “only fair” residents contribute when local government budgets are under “such huge pressure”.

A spokesperson said: “We believe the level we have set is quite affordable and reasonable and should not place too great a burden on those residents on low incomes who are now being asked to contribute for the first time.”

The percentage increases were gathered from councils under FOIA, the cash impact on tenants was estimated using council tax levels and claimant caseload by area.