Council tax reforms could exacerbate a worsening situation

Posted by: Edward Ware, 31 January, 2013

On the day that marks the deadline for councils to submit plans to replace council tax benefit with localised tax support, StepChange Debt Charity is warning that it could worsen the already perilous financial position of some of society’s most vulnerable. The charity says that, even prior to the changes, it has seen a significant rise in the number of people with council tax arrears.

Rising council tax arrears

• In the last year the charity saw the number of its clients with council tax debts rise from 8.7 percent in 2011 to 13 percent in 2012. 

The rise coincided with increases in the number of the charity’s clients falling behind with rent and energy bills, as stagnating wages and rising living costs severely impacted people’s ability to make ends meet.

The charity says that council tax benefit is only paid to lower-income households, which means that any resulting cuts could place unrealistic financial demands on these households, leading to even greater financial hardship.

StepChange Debt Charity’s head of policy Peter Tutton, said: 

“This cut is in fact a tax rise on some of the lowest income households and the government needs to consider providing greater support for local authorities to assist those in financial difficulty.

“Councils will in turn need to give careful thought about how they can protect the financially vulnerable from falling into even greater hardship. For those in economic difficulty we urge them to seek help from organisation like StepChange Debt Charity”.