Latest Public Sector News


Councils increase tax on low-income families to compensate for cuts

Councils are raising tax on low-income families as a result of central government cuts, new figures indicate.

The research, conducted by the New Policy Institute and funded by the Joseph Rowntree Foundation, shows that in 2016-17, 2.2 million families will have to pay an average of £169 additional council tax as a consequence of the end of Council Tax Benefit (CTB), a national scheme of support for council tax bills, in April 2013.

It was replaced by Council Tax Support (CTS), a scheme where councils develop their own schemes for working-age residents. Councils received a 10% funding cut in the move between schemes and funding for CTS is decreasing every year.

In April 2016, 30 councils increased the minimum payment that all working-age residents are required to pay regardless of income, nine introduced them for the first time and just three reduced them.

Low income families are disproportionately affected, with 70,000 families living in areas where a minimum payment is being introduced for the first time and 27,000 in areas where it is being increased.

The cost of CTS for council taxpayers is increasing, compared to an average of £149 in 2014.

Claire Kober, the Local Government Association’s resources portfolio holder, said: “No one wants to ask those on the lowest incomes to pay more.

“But faced with significant cuts to the money we receive to look after the elderly, protect children, repair the roads and collect the bins, many councils have had little choice but to reduce the discount.

“Councils know how tough things are, and are doing their best to protect those affected the most, whether through introducing hardships funds or changing the way we collect unpaid tax. But these measures can only go so far in alleviating the burden.”

Theo Barry-Born, the researcher behind the report, said that the tax increases for the poorest look set to increase in future years as a consequence of increased financial pressures on councils.

Figures from the Chartered Institute of Public Finance and Accountancy released last month show that this year will see the biggest rise in council tax in eight years everywhere except London.

Other changes include 12 councils that introduced a band cap (two changed existing caps and one removed a cap), 11 that reduced the amount of savings allowed (the majority from £16,000 to £6,000), and six that reduced or abolished the second adult rebate.

Special protections for vulnerable groups were introduced by six councils, removed by five and replaced with discretionary hardship funding in two cases.

To see a list of every local authority's CTS for 2016 and its impact, go here.

6 April UPDATE

A Department for Communities and Local Government spokesperson said:"This government is committed to keep council tax low for everyone. It is for councils to decide the levels of support people should receive with their council tax bills and to ensure that the effect on low-income council tax payers is proportionate and fair.”

 (Image c. Joe Giddens)





There are no comments. Why not be the first?

Add your comment



public sector executive tv

more videos >

last word

Prevention: Investing for the future

Prevention: Investing for the future

Rob Whiteman, CEO at the Chartered Institute of Public Finance (CIPFA), discusses the benefits of long-term preventative investment. Rising demand, reducing resource – this has been the r more > more last word articles >

public sector focus

View all News


Peter Kyle MP: It’s time to say thank you this Public Service Day

21/06/2019Peter Kyle MP: It’s time to say thank you this Public Service Day

Taking time to say thank you is one of the hidden pillars of a society. Bei... more >
How community-led initiatives can help save the housing shortage

19/06/2019How community-led initiatives can help save the housing shortage

Tom Chance, director at the National Community Land Trust Network, argues t... more >


Artificial intelligence: the devil is in the data

17/12/2018Artificial intelligence: the devil is in the data

It’s no secret that the public sector and its service providers need ... more >

the raven's daily blog

Cleaner, greener, safer media: Increased ROI, decreased carbon

23/06/2020Cleaner, greener, safer media: Increased ROI, decreased carbon

Evolution is crucial in any business and Public Sector Executive is no different. Long before Covid-19 even became a thought in the back of our minds, the team at PS... more >
read more blog posts from 'the raven' >

editor's comment

25/10/2017Take a moment to celebrate

Devolution, restructuring and widespread service reform: from a journalist’s perspective, it’s never been a more exciting time to report on the public sector. That’s why I could not be more thrilled to be taking over the reins at PSE at this key juncture. There could not be a feature that more perfectly encapsulates this feeling of imminent change than the article James Palmer, mayor of Cambridgeshire and Peterborough, has penned for us on p28. In it, he highlights... read more >