Every council in England has been told to cut money from their budget. How much varies between councils and it is down to individuals within each borough to decide where the cuts should be made. Many councils are making sweeping cuts in just one area – Newcastle, for example, has made the controversial decision to cut Arts funding by 100%.
In order to redress this balance, there is the unwelcome possibility that the cost of council task could balloon. In fact, some local councils are even considering demanding council tax from their poorest residents and those who have traditionally been exempt to the expense. As many as three quarters of authorities are expected to take the decision.
In which case, households that are already struggling financially could see their council tax bill increase by hundreds of pounds.
Council tax increases for many households…
At present, central government determines the deliverance of council tax subsidies. This involves households with no working adults or with persons earning the minimum wage, who have, up until now, been able to claim support with council tax. However, from April this year it will be local authorities who decide who gets what… or in many cases who doesn’t.
Although a number of councils will cut spending elsewhere, a survey carried out by Revolution Foundation, resulted in worrying news for low earners.
According to their findings, up to 74% of councils plan to bill those who were previously exempt, in addition to charging more from those who had their bill subsidised previously. This includes people on benefits, who will be expected to pay 20% of their council tax bill, as their other funding is systematically cut.
In some cases, there is a margin of just one street between those who will have to pay more and those who will be un-effected. It all depends on your council.
The New Policy Institute have carried out research that demonstrates these discrepancies. Instead of looking at things nationally, they have focused in on the impact within individual authorities. In London for example, Tower Hamlets council have decided they do not need to call upon the poorest in the area to start paying council tax. However, low income families and households in another London borough, Brent, will be asked to pay up to £240 extra each year. Little wonder then that many feel the need to protest against these changes.
Unwelcome news for families
After the announcement of cuts to other benefits, this is more than unwelcome news for England’s poorest families and seems somewhat insensitive of councils. You could be forgiven for seeing it as the easy decision to make. The Revolution Foundation also point out a possible problem with this new plan.
Knowing that many people will find it understandably difficult to find up to £600 extra each year, they say: “The new system will result in hard-pressed councils spending scarce resources chasing some of the poorest people in the country for non-payment.” Something of a false economy perhaps?
The government reasons that with local authorities costing an awful lot to fund, it is only right and proper that they make the effort to make money in addition to spending it. But it seems that is an awful lot of pressure coming off Whitehall’s shoulders and falling into the laps of local councillors. They need to simultaneously make savings, deliver the services people expect and earn money. A tough ask.
The government continue to say that they understand how over-stretched some people are in these economically tough times, although these proposed council tax changes and the growing number of people reliant on food banks could suggest otherwise.
If anything, the changes to council tax policies could in fact lead to an increase in council tax debt and adding more pressure to the finances of families who are already struggling to survive an already stretched budget.