An extra 1.4 million households now pay some council tax following the delegation of council tax support schemes to local authorities in 2013, an Institute for Fiscal studies report concluded. The scheme allows those on a lower income to have a reduction of up to 100% on council tax.
Those who pay council tax – who did not before - were more likely to fall into arrears than others whose existing bills had increased, an event in Manchester - held in association with CIPFA - to discuss the IFS report on localised council tax support schemes heard.
Thomas Pope, research economist at IFS, said: “An average of 700,000 households in England report being in arrears each year, but we know that is an underestimate. For example, bailiffs were called on over one million households in 2014-15.”
The proportion of lone parents who have fallen into council tax areas over the past six year was 14.2 percentage points. For renters it was 10.3 percentage points.
Pope said that for people who have had their CTS funding cut since 2013 there has been a 54% increase in council tax arrears.
“What matters is not how much you lose or how big your bill is, it’s whether you are given a new council tax bill to pay,” Pope added.
The think-tank’s research showed “clear evidence of substantial and long-lasting payment problems as a result of the reforms,” he said.
The research noted that 3.6 million working-age households’ were now entitled to 24% less payment support on council tax than under the former system, which was controlled by central government.
Where councils introduced a minimum council tax payment, calls to Citizens’ Advice had shot up by 15-20%, the IFS noted. In the 2018-19 financial year, 79% of councils in England had a minimum payment policy in place.
Speaking at the event, CIPFA chief executive Rob Whiteman said the decision to delegate council tax support schemes to local government “was probably an act of money saving and an act of devolution”.
Whiteman suggested that “there are some questions about the efficiency” of localised CTS schemes – the IFS research notes that non-collection rates stand at 25%, ten times higher than pre-2013 levels.
A survey published in February found that 97% of councils in England plan to raise council tax rates in 2019-20.
