Council Tax

Support for council tax bills is becoming increasingly patchwork

  • Published: Apr 14, 2016
  • Author: Theo Barry Born
  • Category: Council Tax

In the fourth year of local Council Tax Support (CTS), disparities between the amount of support received by low income claimants in different areas are larger than ever before.

Our latest research, which models the impact of changes to local schemes each year, shows that 340,000 low income families are going to be affected by a rising “minimum payment”, requiring all working-age residents to pay some proportion of their council tax. Among this number, 70,000 are in areas that introduced a minimum payment for the first time, and will on average face a council tax bill of £171 more than they would have under the previous system of Council Tax Benefit (CTB).

Across England, 690,000 will be required to pay at least £200 more this year than they would have under CTB. This compares to 41 local authorities that have maintained the same level of support as the previous system. Low income families in some areas, but not all, are bearing the brunt of this particular welfare reform.

Why is this happening? When CTB was replaced with localised CTS (or Council Tax Reduction) in April 2013, councils saw a 10% reduction in funding for the new schemes. This funding was rolled into the general grant councils receive from central government, so has also since been affected by cuts to this general grant. In the fourth year of CTS, many English local authorities have again decided to reduce the amount of support they offer working-age residents.

Despite the budgetary pressure facing local authorities, some are acutely aware of the effects of cutting support to those on the lowest incomes, particularly the inability to pay. This is borne out by further NPI research which compares council tax arrears in 2014-15, the second year of localised CTS, with the same in 2012-13. Our analysis shows that council tax arrears had risen by 34% in the 47 councils with a minimum payment of more than 20% in 2014-15 (controlling for increases in the council tax base), while arrears fell by 7% in the 45 areas that had until that point absorbed the cuts.

When we published our findings last year, it seemed that minimum payments would stabilise at around 20%. Five councils with higher minimum payments reduced theirs in April 2015, in some cases citing falling collection rates and growing arrears. Three more so have done so in April 2016, but the overall trend remains overwhelmingly in the opposite direction.

There are 67 councils in April 2016 with a minimum payment of over 20%, 14 more than last year. Among this group, 11 councils have a minimum payment of over 30%. In the council with the highest minimum payment, Kettering, all working-age residents will pay at least 45% of their liability. This will require job seekers to spend around 10% of their weekly income on council tax.

Councils lacking the capacity to raise revenue through other means are faced increasingly with balancing support for the poorest and most vulnerable with financial sustainability. The localisation of CTS looks set to continue as a case of each according to where they live.

[This blog first appeared on the Local Government Chronicle website on 5th April 2016]

For additional information, databases and analysis of CTS schemes and their impact on claimants, visit


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