LOW-INCOME families will see their council tax bills rise by up to £600 a year from April, warns a report by the Resolution Foundation.
The think-tank said yesterday: ‘As a result of council tax benefit reform, No Clear Benefit shows that three-quarters of local authorities are set to demand increased payments from the 3.2 million poorest working-age households who currently pay either no council tax or a reduced charge.
‘Families are facing a hike of more than 330 per cent in the most severe cases.
‘It comes as the government hands responsibility for council tax support (CTS) to England’s 326 local authorities, along with a 10 per cent cut in funding for it.
‘The government has insisted that pensioners are fully protected from any rise under the new localised system, known as council tax support, meaning that working-age households will bear the full brunt of the changes.’
Resolution Foundation chief executive Gavin Kelly warned: ‘Millions of England’s poorest households, both in and out of work, are already very close to the edge. They are going to find it very hard to cope.’
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 says.
Its report coincides with the deadline for local authorities to submit their plans for changing council tax benefit.
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 say they have not been given enough freedom to manage the changes.
In Wales, the 10 per cent cut in council tax support is being absorbed by the government, and not passed on to local authorities.
In Scotland, the cost is being shared between councils and the Scottish government, maintaining support for low-income residents.
But the 326 councils in England will be left with a shortfall if they intend to maintain the level of existing council tax benefit payments.
Some are making cuts 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.
Some campaigners have likened the change to the ‘poll tax’, in that people are asked for a contribution regardless of their ability to pay.
The Labour Party says the policy is deeply unfair, and will cause havoc with hundreds of thousands of people unable to pay the bills.
Responding to the Resolution Foundation report, Cllr Sir Merrick Cockell, Chairman of the Local Government Association, said: ‘The 10 per cent cut in funding has left many councils with little choice but to reduce the council tax discount offered to people on low incomes.’
An LGA spokesman 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?’
