Thousands of Bedroom Tax Victims Also Hit By Cuts to Council Tax Benefits

Tens of thousands of victims of the bedroom tax are also being clobbered by cuts to council tax support, new research shows. The analysis found 270,000 people penalised for having a spare room have suffered an additional blow by seeing their council tax benefit slashed. The New Policy Institute (NPI) said the victims of the hated bedroom tax have seen their housing benefit cut by £15.61 a week on average. And they are also having to pay £2.86 a week in rates since Eric Pickles cut council tax support in 2013. Many of them are disabled, former service personnel and army widows. Read more on the Daily Mirror website.

Shortfall in Council Tax Support Funding

Rising numbers of families on low incomes are likely to face bigger council tax bills this year because of a shortfall in government funding for council tax support. Local authorities are warning that they will have to ask those earning the least to pay more council tax this year – or make even bigger cuts to already squeezed local services to meet the shortfall. With councils already needing to find £2.6 billion savings in 2015/16 due to a cut of 8.8 per cent in overall government funding for local services, many are struggling to find additional money to protect discounts for those on low incomes.  Read more on the LGA website.

Benefit Changes Mean a Choice of 'Eat or Heat' For More Families

Soaring numbers of families with disabled children are being forced to go without food or heating because they can no longer afford the basics, according to research from Contact A Family. One third of families with disabled children are worse off as a result of benefit changes – nearly half by more than £1,500 a year. Changes to tax credits, a reduction in help with council tax and the "bedroom tax" were the commonest problems reported. Overall, 83 per cent of parents with disabled children say the family is now having to go without. Of these, almost a quarter say their child's health has worsened as a result, and more than two thirds suffered ill health themselves. Read more on the Independent website.

Court Rules against Town Hall on Council Tax Scheme

Councils across England may have to overhaul their procedures on reducing council tax support after a court ruled a London borough’s consultation was unlawful.  The Supreme Court has decided that Haringey Council’s 2012 consultation on the establishment of a council tax support scheme was unlawful. In April 2013, the government abolished council tax benefit. Local authorities have since consulted on and implemented replacement schemes. However, due to a 10% cut in funding, the majority of councils adopted schemes that reduced the level of support available. The Supreme Court found that Haringey Council’s consultation was unlawful because it failed to provide alternative options for meeting the funding shortfall other than a reduction in support. The court found the document misleadingly suggested that the only option available was to reduce the support available. Read more on Inside Housing.

Local Authority's 'Benefit Tourism' Rule Discriminated Against Residents

A local authority acted illegally when it introduced strict residency criteria designed to prevent it becoming a magnet for "benefit tourists" priced out of high-cost areas of London and the south-east by welfare reforms, a judge has ruled. Sandwell council brought in a policy over a year ago which prevented people on low incomes claiming council tax support unless they had been resident continuously in the borough for two years prior to the claim. Rather than discouraging "incomers" from the south-east, however, the court heard that the policy seemed to mainly affect people who had been born in Sandwell and had strong family connections there, while also discriminating against local women affected by domestic violence. Thousands of Sandwell residents denied council tax support since April 2013 may now be eligible to claim their money back. Read oore on the Guardian website.

Arrears Rise Fastest Where Support Is Cut Most

Fifteen months after Council Tax Support was localised, new figures show that arrears have increased by 20 per cent. The CLG’s new statistics on council tax collection in England – covering April 2013 to March 2014 – give us the first official data to assess the impacts of the localisation of Council Tax Support (CTS). A headline finding was that while more than £1 billion extra was collected, in-year arrears increased by £145 million – up more than 20 per cent on the previous year. Using data collected by NPI for JRF, we have linked these outcomes to the CTS scheme introduced by each council. The findings do not bode well for the future of localised CTS. Read more on the JRF website.

Council Tax Arrears Now Biggest Debt Problem

One in five people reporting debt problems to Citizens Advice has a council tax arrears issue. New figures show that between January and March 2014 council tax debt was the number one debt problem the charity helped with. Up until this year credit card and unsecured personal loans were the most common types of debt people approached Citizens Advice about. The number of people struggling with council tax payments has rocketed since Council Tax Benefit was replaced by localised Council Tax Support schemes in April 2013. In the first three months of this year 27,000 people with a council tax arrears problem got help from Citizens Advice - a 17 per cent increase on the same period last year. Read more on the Citizens Advice website.

Sharp Rise In Social Housing Rent Arrears Cases

The number of social housing rent arrears cases reported to Citizens Advice has increased by 13% since the same time last year due to the introduction of the bedroom tax and other welfare cuts. The national charity warned that the dramatic rise in rent arrears and threatened homelessness demonstrates that households are not yet feeling the benefit of the improved economic outlook. The charity suggests says the impact of the under-occupancy penalty, commonly known as the bedroom tax, combined with changes to council tax support, has contributed heavily to rent arrears problems. The North East and West Midlands are the worst hit English regions per head of population and the steepest year-on-year rises were in the East Midlands and Yorkshire and the Humber. Read more on 24dash.

Is Universal Credit Worth Saving?

The National Audit Office (NAO) report ‘Universal Credit: Early Progress’ was as damning as is possible for such a report to be. It criticised the governance, planning and oversight of the whole project, whose initial timetable has slipped alarmingly and final delivery date of next Autumn looks exceptionally optimistic.  Replacing six benefits with one is not as simple as it seems. Paying the housing element to the claimant is less simple than paying it to the landlord. And what UC simplifies, the bedroom tax and localisation of council tax support make complicated again.  At what point are gains outweighed by the losses? UC is currently in its pilot phase, and some of the data coming out of these pilots, particularly regarding the housing benefit aspects, is pretty worrying. UC was oversold as a silver bullet to tackle poverty/worklessness/ benefit dependency, call it what you want. But the benefit system has only ever been one part of the problem, and reducing efforts to tackle such issues to a piece of software was always going to fall short. Read more on the New Policy Institute website.

Welfare Cuts Mean a Dramatic Rise in Council Tax for the Poorest

The decision to reduce the budget for council tax support by 10 per cent means low-income households face a tax increase of up to £600. Council Tax Benefit, the most widely claimed benefit in the UK, which provides 5.9 million low-income families with help paying their council tax will soon be abolished. From 1 April, responsibility for council tax support will transfer from Whitehall to local authorities in England. Few have yet grasped the full implications.  Three-quarters of English councils are set to introduce less generous systems of council tax support. Over a third are set to introduce schemes that severely reduce support. Only around a quarter of councils feel they are able to absorb the funding shortfall and maintain current levels of support.  What does this mean for low income households? The answer is set out in a report – No Clear Benefit - from the Resolution Foundation. It shows that while the government talks up its decision to "freeze" council tax, millions of households – both in and out of work –in fact face swingeing increases.  Download a copy of the report from the Resolution Foundation website.

Government Fails in Bid to Block Council Tax Benefit Review

The Government has failed to block a bid by peers ordering Eric Pickles to commission a formal independent review of council tax support three years after its implementation.  The amendment - tabled by Labour peer Baroness Hollis of Heigham - was successfully voted in favour by peers - despite attempts by the Government to block it. Critics of the reform point out that cuts will be pushed onto low-income working age claimants as pensioners will be protected.  Thus, those who have never paid council tax could find they’re liable for payments of up to £200 a year.  Read more on 24dash.

Peers Win Council Tax Benefit Review

Peers have defeated the government on an amendment to the Local Government Finance Bill.  The bill will abolish council tax benefit and replace it with a grant which only covers 90 per cent of the cost in order to save £500 million.  Now peers have voted to accept an amendment which would force the communities secretary to commission an independent review of council tax benefit reduction schemes within three years. The amendment, tabled by Labour peer Baroness Patricia Hollis, Liberal Democrat Lord John Shipley and crossbencher Lord Richard Best, was passed by 203 votes to 165. Baroness Hollis warned that the council tax localisation policy risks ‘poll tax mark two’. Read more on Inside Housing.

Inquiry into the Implementation of Welfare Reform by Local Authorities

The CLG Select Committee are holding an inquiry into the implementation of welfare reform by local authorities, they will be considering a number of issues including the following:

    *how effectively are CLG and DWP working together to implement welfare reform

    *is the timetable for welfare reform achievable

    *safeguards to protect social landlords from financial harm resulting from direct payment of housing benefit to claimants

    *are local authorities being allocated sufficient resources to deliver services such as localised council tax support and advice to claimants on universal credit.

The closing date for submitting evidence is 14 December by 11am. Read more on the Parliament website.

Localising Support for Council Tax: Transitional Grant Scheme

The CLG is making available an additional £100million for one year to support those local authorities in developing well-designed council tax support schemes and maintain positive incentives to work.   The grant will be payable in March 2013 to those authorities who adopt schemes that must comply with criteria set by Government to ensure that low income households do not face an extensive increase in their council tax liability in 2013-14. This funding will enable councils to explore more sustainable approaches to managing the funding reduction that minimise the impact on vulnerable taxpayers.  Download a copy of the scheme details from the CLG website.