Poorest face council tax rise, says anti-poverty group

More than two million of the poorest households in England will pay more council tax from next week because of benefit changes coming into force, an anti-poverty think tank has said.

The average increase for a low income family will be nearly £140 a year, said the Joseph Rowntree Foundation.

Ministers said councils should protect the most vulnerable from the increases.

But the Local Government Association warned of an increase in those unwilling or unable to pay the tax.

The body, which represents councils in England and Wales, said this could have a knock-on effect on funding for local services.

'Strained budgets'

The Joseph Rowntree Foundation's research found that 2.4 million low income families face an average rise in their council tax bills of £138 from 1 April.

It found that abolishing council tax benefit would leave 150,000 families paying on average £300 more a year, while 1.9 million claimants who do not pay anything now will be billed on average £140 per year.

Council tax benefit is being replaced by a new system - council tax support - and responsibility for it is being moved from central government to councils.

At the same time, the total spent on the benefit is being cut by 10% - and each council in England has had to decide whether to pass on the reduction to residents.

Most are to increase bills for low income families.

The report, written by the New Policy Institute (NPI) for the foundation, found 232 local authorities had devised schemes that would demand council tax from everyone regardless of income, while 58 will retain current levels of support for families.

Chris Goulden, head of poverty at the foundation, said: "Some of the country's poorest families must find £140 extra from their strained household budgets to pay council tax for the first time.

"Making up the shortfall will be beyond most, with working hours under pressure and benefits falling behind inflation.

"This tax hike will push people into poverty or cause more hardship for already very poor households, taking money from families who had little to start with."

'Unjust and unwise'

Sabrina Bushe, researcher at NPI, said: "From Monday over two million households that were previously deemed too poor to pay council tax will find hefty bills landing on their doormats.

"Hitting only the poorest and most vulnerable, this tax increase - which won't raise much more money than it costs - is both unjust and unwise."

Housing Minister Mark Prisk said: "Council tax benefit spending doubled under Labour and welfare reform is a vital part of help to tackle the deficit that we inherited. The localisation of council tax benefit will give councils stronger incentives to cut fraud, promote local enterprise and get people back into work.

"Council schemes should have taken into account the impact on vulnerable people. For people facing genuine hardship, there are free advice services who can offer help and support, and many councils have put in place hardship funds to provide financial assistance to people in difficult circumstances."

He added that the government had taken action to freeze council tax bills for three years.

"As a result council tax has fallen by just under 10% in real-terms, helping hard-working families and pensioners by providing much-needed cost of living assistance," she said.