Millions face Council Tax rises of up to £600

ReenaSewraz
by Lovemoney Staff ReenaSewraz on 31 January 2013  |  Comments 14 comments

Households face Council Tax hikes of up to £600 a year as some councils in England get set to pass on a 10% benefit funding cut.

Millions face Council Tax rises of up to £600

A typical Council Tax bill will rise by £96 to £255 a year from 1st April, but could go up by as much as £577 a year.

That's according to research from think tank Resolution Foundation, and it's all down to Council Tax Support (CTS) replacing Council Tax Benefit (CTB) in April, with the responsibility of managing who qualifies shifting from the Government to local authorities.

Cutting the funding

The existing system of CTB is means-tested and helps 6 million low-income families with their council tax bills.

The new CTS system will have 10% less funding which is set to save the Government £500 million a year.

And the Resolution Foundation's study suggests almost three quarters of English councils will respond to these cuts by offering a less generous system of support.

2.5 million who are unemployed and pay no Council Tax on the CTB system will now have to start paying between £96 and £255 a year.

The hardest hit will be CTB recipients who are in work, including single parents who work part-time and those on minimum wage who depend on childcare. They will face a hike of up to £577 a year, depending on how far a local council chooses to pass on the cuts.

Pensioners will be fully protected from any hikes so people of working age already on CBT, around 3.2 million, will take the hit as councils struggle to manage the shortfall.

Households in Wales and Scotland won’t be affected as costs will be absorbed by councils and in some cases the Government.

Absorbing the impact

184 of the 326 local councils in England have submitted plans on how they plan to deal with the changes.

Of these 51 will absorb the costs of the new CTS system and residents won't see a change.

But 60 councils have plans for a moderate increase, 26 for a large increase and 39 have submitted plans for a severe increase in council tax bills for residents in need of assistance.

The Government will provide £100 million of support for the local authorities that limit the impact for those on benefits or low incomes.

The changes are part of the welfare reforms designed to tackle the budget deficit.

The news comes as other benefits are set to rise slower than inflation.

More on benefit changes:

Government childcare plans will INCREASE costs!

Child Benefit changes: what you need to know

Benefit reform: all you need to know about the Universal Credit

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Comments (14)

  • Bluecake
    Love rating 5
    Bluecake said

    Oh dear, no doubt being such an emotive subject I will probably receive a barrage of abusive comments but it seems that the problem is that our national debt is esculating and has been for a long time. By a long time is may even stretch to decades, I am no expert but it seems that at some point something has to change - quite simply if there is not enough money then there is not enough money! Things have got to give and I am so glad it isn't me who has to make the decisions as to where the axe falls. So it seems we have all got to accept things are going to be tighter.

    The alternative is, I believe, that we bury our heads in the sand and make it worse for our children in the long run, but I want to look my children in the eye and say yes I was prepared to give it a go.

    I concede my family are not on benefits but both myself and my husband work hard on minimum wage.

    Report on 31 January 2013  |  Love thisLove  2 loves
  • MK22
    Love rating 169
    MK22 said

    I believe that NATIONAL debt (as distinct from individual debt) is relatively small versus GDP, certainly say compared with the immediate postwar period. Whether or not taking money from the poor rather than the rich is the best way of solving it is entirely another matter, but frankly the poor don't have a lot to take, so I would agree the route the Government is taking will take decades or even centuries to resolve the problem.

    Report on 31 January 2013  |  Love thisLove  0 loves
  • bengilda
    Love rating 100
    bengilda said

    Don't see many of these poor people in subsidised housing without a smart phone nor many of the properties without a Sky dish or cable box on the wall, not forgetting the cigarette butts outside the door. Enough there to cover the increase in Council Tax!! Don't like it? Then vote out the Councillors next local election and elect those candidates who propose economies and cutting "prestige" projects, who realise that austerity begins at the Council door and learn to financially control their executive managers.

    No matter where you live or who you are it is time to appreciate that we, that's you and me and all the rest of us, are going to suffer somewhat to pay back all that Gordon Brown borrowed for us to have a good time.

    Report on 31 January 2013  |  Love thisLove  0 loves
  • sodit
    Love rating 135
    sodit said

    I see single parents are being used to lay a guilt trip on us all again.

    Perhaps we should be asking how, given that they're single, these people became parents?

    Perhaps they were in a "partnership" which disolved... then we should be asking why custody of the offspring was given to a parent who is unable to provide for it?

    There will be some hard cases, where bereavement is the cause of loss of a provider, but that is what savings are for, that is what family is for. Did these people recklessly start a family without first having build up a cushion of savings? Did these people recklessly abandon their family connections?

    There may be a biological imperative to reproduce, but humans are sentient beings and should be able to master their animal urges.

    Report on 31 January 2013  |  Love thisLove  0 loves
  • jamiecfc1
    Love rating 42
    jamiecfc1 said

    The biggest issue with Council Tax I have is that no one seems to be able to tell me the logic behind why your house is in a particular band. I have just moved about 15 miles from a large 3 bed house to a 1 1/2 bed much smaller house and yet my CT went up by £250 a year - quite where these people are that pay these "typical" bills of £255 per year I would love to know, mine is almost £1500. The Valuation officer is coming to see me today for a discussion, I'm not hopeful but we'll see...

    Report on 01 February 2013  |  Love thisLove  0 loves
  • MK22
    Love rating 169
    MK22 said

    Oh, and can respondents please stop proving their lack of knowledge by blaming Gordon Brown for the current situation. It goes a lot further back than that! And if the Cameron/Osborne/Clegg triplets are so much better, how come it appears we are heading for a treble dip recession?????

    Report on 02 February 2013  |  Love thisLove  0 loves
  • r
    Love rating 98
    r said

    Oh! Come on, @MK22, Brown was a disaster in terms of getting this country into a mess and the "triplets" are too weak to do do what is needed to correct it.

    The current "set of rot" started at the end of the Thatcher era when the banks were given a free hand to do what they wanted. Why didn't any of the successive governments see what was happening and put a stop to it then?

    r.

    Report on 03 February 2013  |  Love thisLove  0 loves
  • yocoxy
    Love rating 152
    yocoxy said

    The current Government is cutting too hard.

    The current Government isn't doing enough to reduce the debt

    You can't have it both ways..

    Oh and the removal of child benefit from anyone on £40k is painful for many but isn't an attack on the poor..

    Report on 04 February 2013  |  Love thisLove  0 loves
  • Mike10613
    Love rating 626
    Mike10613 said

    Someone has to pay for HS2! I do think that many people in and around London who do minimum wage jobs will now live in abject poverty. How will they react to that? They are being forced out of London. Will they start emigrating. Who will they vote for? Will London become a rich man's playground and a place where poor people fear to tread?

    Report on 04 February 2013  |  Love thisLove  0 loves
  • bengilda
    Love rating 100
    bengilda said

    Administering this welfare payment is costly in itself and very open to abuse and fraud. It is based on the declared financial situation of the council tax payer and, where applicable, partner/spouse. It takes no account of other sources of income that may not be declared nor the income of any others residing in the property.

    I guarantee that, with very little exception, the claimant can afford a contract mobile phone and that at least 60% have some form of pay TV.

    This is a Benefit that cannot be justified in today's financial climate.

    Until Councils learn to economise and stop spending on vanity projects, Councillors promises and Party manifesto promises and "handouts" and can really reduce taxes then there will always be this tax drain on our purses.

    Council Tax Benefit is funded by all other tax payers paying more than their share. It should be phased out over 5 years by which time claimants will have adapted and Councils will each be able to reduce staff by one!

    Report on 04 February 2013  |  Love thisLove  0 loves
  • r
    Love rating 98
    r said

    @yocoxy:

    "The current Government is cutting too hard.

    The current Government isn't doing enough to reduce the debt"

    A good observation; I don't know whether or not the Government is cutting too hard but I do think that they are doing very little to reduce the debt. The fact is, government debt is STILL rising, year on year. It seems to me that they are doing nothing to reign in on their spending. If they cannot do this, all the welfare reductions/limits will have no effect at all.

    I think @bengilda is right; we see little evidence of councils reigning in their spending either.

    Shouldn't we be asking WHY so many people are poor and WHY so many people seem to need welfare in this country? What is poor? The people we should be helping are those that have fallen on hard times due to illness or loss of work and, also, those that are not capable of holding down a job for mental health or similar reasons.

    I don't think the government (us) should be paying benefits to cover the normal cost of living expenses (which Child Benefit, amongst other things, does). This distorts so many other things. Housing allowance distorts rents, for example.

    This country seems to be a magnet for foreign labour - why are so many immigrants coming here if conditions here are so bad?

    I still think, from my own knowledge in this area, that many of those that are out of work are there from choice. As I said, support the genuine unemployed and question the employable.

    r.

    Report on 04 February 2013  |  Love thisLove  0 loves
  • tindeanboy1
    Love rating 15
    tindeanboy1 said

    From memory when Tony Blair and Gordon Brown came to power they said the economy was in a mess and they gave us cutbacks and extra taxes for a couple of years which got it under control.

    That was when Gordon got the nickname "The Iron Chancellor", with his cuts and as we came out of the recession (the mid-90's one) they got the economy in really good shape.

    It was only after he levered Tony Blair out of the driving seat (and to increase his popularity I suspect) that his government started throwing money at benefits etc.

    To be fair to him the economy was booming, so increasing public borrowing didn't appear such a problem at the time...

    Now in 2013 however is a different matter.

    If the country wants any chance at a booming economy again we have to bring Government spending back under control.

    Austerity won't last for ever, just before the next General Election I suspect we'll see either increases, or promises of indreases in spending for "the vulnerable" again.

    Report on 04 February 2013  |  Love thisLove  0 loves
  • johntee
    Love rating 0
    johntee said

    All our governments, irrespective of party, appear to be continually struggling with many major 'irresolvable financial issues' which they then conveniently blame on their predecessors once they come to power. I think this is commonly referred to as a ‘cop-out’ and 'hood-winking'. If I had operated my own business with comparative practises to that of our successive governments I would have been bankrupt in no time, and with no taxpayers to bail me out on demand. Ministers have the best of both worlds, and with total protection. Maybe some ministers may categorize me as a 'pleb' for such observations? Then so be it. However, I'm proud to say I have always kept my 'finger on the pulse' and my eyes were most certainly wide open all the time. I could justifiably challenge our country’s officers to demonstrate the same within their privileged ‘upper crust' roles as administrators?

    Interestingly, I happened to watch Piers Morgan's 45 minute interview on CNN with US Governor Jesse Ventura back in August 2012 (approx) and believe it kind of reflects what's going on generally in politics. It's not just in the USA though, one may tentatively examine whether some of his observations might apply within our own political 'camp'? Governor Ventura, an 'Independent Candidate' in US politics, was highly critical of his country’s political system, with his remedy being the eradication of those who perform in their own interests rather than that of the nations.

    Out of curiosity I've just done a quick search of Youtube and find it's available if “Jesse Ventura vs. Piers Morgan on CNN” is entered into the search box. It might be worth a watch.

    Alternatively please try this link to the said interview.

    http://www.youtube.com/watch?v=MVVsjNdEs7w

    Without prejudice.

    Report on 04 February 2013  |  Love thisLove  0 loves
  • r
    Love rating 98
    r said

    @johntee:

    I have thought for some time that our political system needs refreshing. We seem to have lost most of the honest politicians of yesteryear.

    By reading these columns, one can see so many views and comments that are from people that are so entrenched in either the traditional "left" and "right" camps that logical thought and argument, based on facts, seem to be impossible.

    I would like to see our successful business people offer themselves as MPs for election; I can think of quite a few who are very successful within the country and who I would trust to a larger extent than I do our present and recent MPs.

    Above all, I would like to see politicians that actually support the Brits (what an old-fashioned idea) instead of wandering off into ego-trips of putting the world (and the EU) right.

    r.

    Report on 06 February 2013  |  Love thisLove  0 loves

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