Council tax shake-up punishing poor people, MPs warn

Margaret Hodge

Margaret Hodge

First published in News The Northern Echo: Photograph of the Author by , Parliamentary Correspondent

POOR people are being punished by a controversial shake-up of council tax, a committee of MPs warns today (Tuesday, March 11)

The disabled, low-paid, carers and jobless have all been hit by new rules requiring them to pay about 20 per cent of the levy, the powerful Public Accounts Committee (PAC) finds.

Its report warns the Government’s promise - that “vulnerable people” would not suffer from the axing of council tax benefit – has been broken.

And it calls on ministers to urgently draw up a “coherent set of guidelines” for town halls that threaten the stated objectives of the policy.

Margaret Hodge, the PAC’s Labour chairman, said: “Local authorities were tasked with protecting vulnerable people such as poorer families, despite the fact that savings had to be made.

“However, 133 local authorities offered no protection to vulnerable groups, other than pensioners and war pensioners.”

Among those 133 councils are several in the North-East, including Darlington, Stockton-on-Tees, Middlesbrough and Redcar and Cleveland.

They all imposed a 20 per cent minimum charge on working-age adults, after the Government slashed funding by ten per cent.

The rules came in after across-the-board council tax benefit was replaced by 230 different support schemes that town halls were told to draw up.

Durham County Council kept its 100 per cent discounts, while Hartlepool, plus Hambleton and Richmondshire, in North Yorkshire, asked for 8.5 per cent of the full charge.

Now today’s report has found that:

* The Government has failed to collect detailed information about local schemes and “their impacts on vulnerable groups”.

* The shake-up is failing to increase ‘work incentives’ in most areas – and have made it less worthwhile to go to work in some.

* Councils have been short-changed because extra Whitehall grants fail to cover the increased cost of collecting council tax from poor people.

* Ministers have failed to set out how councils will adapt their support schemes when the new Universal Credit is introduced, by 2017.

Ms Hodge added: “For some, work simply doesn’t pay under the new scheme. For them, work incentives have actually weakened rather than strengthened – the opposite of what the Government intended.”

The Institute for Fiscal Studies found that inquiries to Citizens Advice Bureaux have rocketed where the poorest now pay some council tax.

And The Northern Echo revealed the changes had left more than 10,000 of the region’s poorest households facing legal action for non-payment.

But Brandon Lewis, the local government minister, rejected the report’s findings – insisting the changes were “fixing the welfare system and reducing the deficit”.

"Spending on council tax benefit doubled under the last Government costing taxpayers £4bn a year – equivalent to almost £180 a year per household.”

Comments (8)

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8:15am Tue 11 Mar 14

Jonn says...

Punishing poor people is the whole idea.
Punishing poor people is the whole idea. Jonn
  • Score: -3

8:33am Tue 11 Mar 14

Madadrian says...

And greedy stinking Darlington council who are controlled by 'caring labour' are top of the list in this area for punishing the poor.
And greedy stinking Darlington council who are controlled by 'caring labour' are top of the list in this area for punishing the poor. Madadrian
  • Score: 19

8:48am Tue 11 Mar 14

miketually says...

I wonder how much extra cash the council actually gets from this? However much it is, it's not justified and shouldn't have happened.
I wonder how much extra cash the council actually gets from this? However much it is, it's not justified and shouldn't have happened. miketually
  • Score: 0

12:02pm Tue 11 Mar 14

cushybutterfield says...

What a load of pure ' political point-scoring' codswallop and so it goes on. Be that as it may.
What a load of pure ' political point-scoring' codswallop and so it goes on. Be that as it may. cushybutterfield
  • Score: 0

4:43pm Tue 11 Mar 14

oliviaden6 says...

Well folks if you do not like the way the current regime is looking after its self do something about at the ballot box, You cannot not pick and choose if the current regime get in again they will cut our throats all the more.
They hung Dick Turpin for Highway robbery its a shame that hanging has been done away with. Darlington needs solid leadership and fair leadership not a leadershipo that is hell bent on making Darlington a fiefdom of the current incumbents.
Well folks if you do not like the way the current regime is looking after its self do something about at the ballot box, You cannot not pick and choose if the current regime get in again they will cut our throats all the more. They hung Dick Turpin for Highway robbery its a shame that hanging has been done away with. Darlington needs solid leadership and fair leadership not a leadershipo that is hell bent on making Darlington a fiefdom of the current incumbents. oliviaden6
  • Score: 10

7:40pm Tue 11 Mar 14

Daveindarlo says...

Everyone should contribute something to housing benefits, it's a household bill that has to be paid for. To a working person on the living wage council tax is a huge some, why should those people pay other who use at least as many of services get off scot free.
Everyone should contribute something to housing benefits, it's a household bill that has to be paid for. To a working person on the living wage council tax is a huge some, why should those people pay other who use at least as many of services get off scot free. Daveindarlo
  • Score: 3

9:03pm Tue 11 Mar 14

Spy Boy says...

A lot of the money that we pay in Council Tax goes to private companies who provide services to the council. Maybe we need to get new Councillors in place that would review this and bring work back In House. The savings would come through large amounts of our money going into someone's pocket.
There must be a list of these payments and the private companies involved.
A lot of the money that we pay in Council Tax goes to private companies who provide services to the council. Maybe we need to get new Councillors in place that would review this and bring work back In House. The savings would come through large amounts of our money going into someone's pocket. There must be a list of these payments and the private companies involved. Spy Boy
  • Score: 1

4:18pm Thu 13 Mar 14

warichunt says...

tristar vela fabrik thirteen ,, a regime of thugs threatening tenants for complaining and making a stand against the abuse people are getting from them , trust I know im one of them ,they got together and have formed cartels across the region raking in millions off benefits .they have pot of £140 million that should go on services ,but are cutting the cash by£35 million. who do people have to complain to see above cartel .
tristar vela fabrik thirteen ,, a regime of thugs threatening tenants for complaining and making a stand against the abuse people are getting from them , trust I know im one of them ,they got together and have formed cartels across the region raking in millions off benefits .they have pot of £140 million that should go on services ,but are cutting the cash by£35 million. who do people have to complain to see above cartel . warichunt
  • Score: 0

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