Let councils abolish single-person discount, says LGA

17 Mar 14
Local authorities lose more than £200m as a result of council tax reductions given to single people in large homes, and town halls should be given the freedom to scrap the discount, the Local Government Association has said.

By Richard Johnstone | 17 March 2014

Local authorities lose more than £200m as a result of council tax reductions given to single people in large homes, and town halls should be given the freedom to scrap the discount, the Local Government Association has said.

The umbrella group of local authorities said the 25% reduction given to working single people living in homes in tax bands E and above was hitting funding for council tax support schemes run by town halls in England. In its submission to the Treasury ahead of Chancellor George Osborne’s Budget on Wednesday, the LGA called for authorities to be given flexibility to alter or abolish the discount, currently set centrally, in the top four bands.

Peter Fleming, chair of the LGA's improvement board, said the group’s projections indicated that funding for council tax support schemes – which were localised last April – could fall by as much as £1bn over the next two years.

‘As a result, increasing numbers of local authorities are facing the unpalatable choice of whether to reduce the council tax discount for the working poor or make additional cuts to local services,’ he added.

‘It is difficult to justify why discounts for wealthy professionals living in large homes are protected while nearby there are low-income families struggling to make ends meet who are having their discounts cut.

‘This “wealthy bachelor” discount currently costs councils £200m per year in lost council tax revenue and is subsidising individuals occupying large homes at a time when there is a dire shortage of housing. Giving local areas the option of removing this automatic discount would help protect discounts for struggling families and those who need it most.’

Responding to the LGA, local government minister Brandon Lewis said: 'Single person council is a long-standing feature of the council tax system, reflecting the fact that single adults make less use of local services than larger households.

'We have absolutely no plans to change this discount, and we have rejected the LGA’s calls for a Bridget Jones tax.'

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