Still too poor to pay: three years of localised council tax support in London

Still too poor to pay is the latest report from CPAG and Z2K in a series that examines how London council tax support schemes have changed in the last three years and analyses the impact these changes have had on claimants.

The report offers new data on council tax support provided by local authorities and compares this data with data from the previous years.

In April 2013, the government abolished council tax benefit and replaced it with locally run council tax support schemes, accompanied by a 10 per cent cut in funding for local authorities.

At the time, CPAG and Z2K were greatly concerned about the financial hardship that this would cause many of London’s poorest residents and the impact this would have on local authorities. They set out to provide yearly data and analysis of 33 different London council tax support schemes.

Three years later, our concerns have been justified. This latest report finds:

• Over 19,000 low income, sick and disabled Londoners were referred to bailiffs in 2015/16, a 51 per cent increase on the previous year
• 98,723 Londoners were summonsed to court for arrears in 2015/16, down from 102,204 in 2014/15, however the number of summonses as a proportion of working-age claimants has slightly increased
• 81,000 claimants were charged a total of £8.8 million in court costs. Since 2014/15, this is an increase of 10,000 claimants and £400,000 in court costs.

CPAG and Z2K recommend that central government should reinstate council tax support as a national benefit providing up to 100 per cent support for people on low incomes. It should also ringfence and separately identify funding for local authorities, so that they can see how much funding they receive and ensure that it is all spent on council tax.

If council tax support remains localised, London boroughs should reinstate 100 per cent support for the poorest residents, following the lead of the seven councils that still maintain it. They should also reduce or keep the minimum payment under 10 per cent and refrain from using bailiffs for collection of council tax, instead engaging with debtors and negotiate repayment plans to keep people out of court.