Call for local councils considering making their Council Tax Support (CTS) schemes less generous to consider the impact on low-income households

  • Jan 23, 2017

A new briefing from the New Policy Institute is calling on local councils considering making their Council Tax Support (CTS) schemes less generous to consider the impact on low-income households.                                                                             

Further increases to the minimum payment, the amount that claimants have to pay regardless of income. Several councils that do not currently have a minimum payment are planning to introduce them. Several of the councils with the highest minimum payments are considering further increases. In choosing to do this, rather than look at alternative means of raising revenue, councils are placing the burden of the reduced funding on their poorest residents.

  •  Mimicking changes to other benefits in CTS calculations, such as how self-employment income is treated under Universal Credit, which can also have significant impacts on low-income residents. 
  •  A small number of councils are making schemes more generous, citing the increase in administration costs required to chase small amounts of money from low income claimants.

Adam Tinson, Senior Research at the New Policy Institute, said “The prospect of another round of cuts to council tax support will be met with dismay from low-income families, many of whom will have frozen incomes in the face of rising inflation due to the benefits freeze. Although councils are facing very large financial pressures, they must consider whether further cuts are worth the increases in administration costs and arrears they are likely to generate.”                                                                                                                                                                                                 

NPI’s past research has found:

  •  In total in 2016, 2.2 million families have been adversely affected by the localisation of council tax, losing an average of £169 relative to the period before localisation.
  • In 2015-16, there was £850m in council tax not collected, including £280m in court and administration costs.
  •  Arrears have risen most in those authorities with the most punitive council tax support schemes (those with minimum payments above 20%), and have fallen the most in those authorities that retained full protection.

2017-18 will be the fifth year since the localisation of council tax support. Each year, the New Policy Institute with support from the Joseph Rowntree Foundation collects information on every scheme in England. This year’s full results will be released in April.