7 Jan 2014

Poor households’ council tax bills double

Council tax bills for some of Britain’s poorest households are set to more than double following the withdrawal of government grant.

Working-age benefit claimants in Birmingham will now have to pay about £200 towards their council tax (based on a band B property) from April, compared with £85 currently.

The council, which approved the plans on Tuesday, says it has been forced to take action because a government grant has been withdrawn which allowed it to subsidise bills in 2013-14.

The nationwide system of council tax benefit was abolished in April 2013, with local authorities left to set up support schemes for people on low incomes.

In Birmingham, working-age benefit claimants are expected to pay 20 per cent of their council tax bill, with exceptions for pensioners and vulnerable groups, including disabled claimants, those with young children and carers.

Last year, Birmingham city council received a one-off £2m grant from the government that enabled it to help people hit by the extra costs.

Grant withdrawn

This meant that people who would have had to pay 20 per cent of their bill only had to pay 8.5 per cent, but this is changing in 2014 because the government grant has been withdrawn. The change is expected to affect about 40,000 households.

Birmingham city council says 41 per cent of local authorities are not providing financial support to vulnerable groups apart from pensioners.

Deputy leader Ian Ward said the National Audit Office spending watchdog had pointed out that the government’s changes to council tax support had “contributed to the overall pressure on local authorities’ finance and we have had to design our own local support scheme against a backdrop of other funding cuts from central government”.

He added: “In order to make sure that we were able to support our most vulnerable citizens, we consulted with stakeholders and affected members of the public between September and December 2012.

“As a result of this consultation the council decided to increase the number of people in the protected categories, most notably to support carers, and this change was approved as part of the scheme implemented from April 2013.”

‘Reform vital’

Local Government Minister Brandon Lewis said: “Spending on council tax benefit doubled under Labour, and is costing taxpayers £4bn a year – equivalent to almost £180 a year per household.

“Welfare reform is vital to tackle Labour’s budget deficit. Under the last administration, more taxpayers’ money was being spent on benefits than on defence, education and health combined.

“Our reforms to localise council tax support now give councils stronger incentives to support local firms, cut fraud, promote local enterprise and get people into work.”

Council tax benefit cuts – the key questions