Finance chief fears collection rate of 35p for every £1 of council tax levied on new payers

Published by 24publishing for 24dash.com in Housing and also in Central Government, Communities, Health, Local Government

One local authority is forecasting a collection rate of just 35p for every £1 of council tax that will be levied on new payers as a result of the Government's welfare reforms, according to a union officer.

The Government is abolishing the current council tax benefit scheme – claimed by nearly 6 million people – where councils receive rebates on the financial support they provide.

Instead, it has told them to come up with their own schemes from next April, cutting expenditure by 10% and handing them the money to administer it.

However, it is the order to protect pensioners from cuts that will force some local authorities to seek minimum contributions from working-age households

This could see those who have never paid council tax previously asked to pay close to £200 a year.

Pete Challis, Unison’s national officer for local government and housing, told the House of Commons Work and Pensions Committee: “There is an issue over the financial efficiency of what appears to be happening. We read the reports that are going to council cabinets up and down the country and finance officers are repeatedly saying this is going to be difficult to collect.

"There’s one authority we’re aware of where the finance officer is going to assume that they are going to collect 35p for every £1 that they’re now going to charge to people who previously weren’t paying. It's because you’re seeking to get money from people that don’t have it when times are very hard."

He believes that increases in collection costs and the use of bailiffs will be a result. "Eventually, we’ll see cases in the courts where councils are seeking to recover small sums of money," he said.

The Government has said it wants the local schemes to provide support and work incentives for those out of employment, despite a large number of claimants being in full and part-time work.

The reforms, say ministers, will also give councils stronger incentives to tackle benefit error and fraud which are currently estimated to cost councils around £200 million a year.

It has also argued that by giving councils capacity to change their current discounts and exemptions for empty and second homes - and through the local retention of business rates - local authorities will be able to offset the reduction in expenditure.