Thousands of the poorest South Devon households face a Council Tax rise next year following welfare reforms. Devon authorities have now published proposals to effectively end the 100 per cent council tax discount for hard-pressed families.
Local authorities are to be put in charge of Council Tax benefits as the overall budget for rebates is slashed by 10 per cent. Pensioners will be protected against any reduction, but many working-age claimants are likely to face cuts.
All residents – barring pensioners, who remain unaffected – will pay at least 25% or 30% of their bill from April if plans put out for consultation by councils go ahead.
Latest figures show that Council Tax benefit is claimed by 17,890 people in Torbay, 6,480 in the South Hams, and 10,220 in Teignbridge.
Councils currently grant rebates to eligible people on low incomes and bill the Department for Work and Pensions. In the past, the unemployed, disabled, full-time Carers and people on low incomes would not have had to pay their full council tax. Now, for example, a £1,000 annual bill will mean paying at least £300 if councils decide the maximum rebate is 70%.
Torbay and Teignbridge Councils are now proposing charging everyone at least 25%, while Exeter and South Hams are suggesting a 30% charge.
The Local Government Association says poor communities will bear the brunt of the cuts – and poor people will not be able to pay.
Indeed, Local Authorities have conceded that up to half of people on low incomes will refuse to pay and that there is little they can do about it.
The sums are so small – on average less than £5 a week – that councils are warning it “would in many cases be uneconomic to recover, with the costs of collection, including legal recovery costs, being higher than the bill”. The result is that councils are now budgeting for large losses and leaving the door open to widespread non-payment.