London's poor struggling with 'new poll tax'
Published by Max Salsbury for 24dash.com in Central Government and also in Finance, Housing, Local Government
London's poor struggling with 'new poll tax'Image: Money via Shutterstock
London's poorest families are struggling to afford to live in the face of a "new poll tax", a report has claimed.
The joint study by charities Child Poverty Action Group and Z2K suggests that poor households are finding it incredibly difficult to pay their council tax (CT) bills following cuts to CT support.
The report - ‘A New Poll Tax?’ - reveals that nearly 4 in 10 Londoners affected by the replacement of CT benefit with local bespoke schemes have been unable to meet payments and have received a court summons.
And the study also shows how the cuts have led to some boroughs being saddled with falling collection rates and rising collection costs.
The report found that:
• At least 313,519 Londoners are expected to pay more CT under their local CT reduction scheme in 2013/14 than they would have under the old CT benefit. On average they were charged £151 more per annum – the equivalent of two weeks' jobseeker's allowance. These claimants are now liable for over £91.5 million in CT annually.
• 39% of affected Londoners have been sent a court summons for non-payment: 118,027 people who are paying more CT under the new CT reduction schemes have been issued with a court summons because they have fallen behind on payments.
• In 2013/14, almost 93,000 CT reduction scheme claimants were charged over £10m in court costs.
• Nearly 16,000 cases have been referred to bailiffs in 2013/14.
• Local authorities are facing lower collection rates. The collection rate for CT owed by CT reduction scheme claimants with an increased liability in 2013/14 was on average 81%, compared to average collection rates of 97.4% in 2012/13.
The report urges the government to restore 100% subsidy for local CT support schemes in 2015/16 and for London boroughs to protect their poorest residents, following the example of the seven boroughs that have continued to pay full subsidy to their poorest residents.
The study concludes that requiring individuals and families living on very low incomes to pay CT will inevitably impoverish many: according to the Institute for Fiscal Studies, child poverty is projected to rise by nearly one million by 2020 due largely to changes to tax and benefits.
Alison Garnham, chief executive of Child Poverty Action Group, said: “This research shows the direct impact that changes to council tax funding are having on the poorest families. Families tell us that it is simply not possible for them to make these make payments from household budgets already stretched to breaking point.
“Problems are being exacerbated for residents by councils increasing the debt owed by adding additional charges to a bill they are already struggling to pay.
“We call on central government and local authorities to stop taxing households that are too poor to pay.”
Z2K chief executive, Joanna Kennedy said: “Although the responsibility for this policy clearly lies with the coalition government this report demonstrates that many London local authorities have adopted policies that are pushing thousands of low income Londoners further into poverty.
“Any policy that results in nearly 40 of those affected being sent a court summons clearly isn’t working.”
“While it is vital that the government restores the funding cut in the meantime local authorities have an opportunity to do more for their residents.”