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Charities say council tax changes will cause “wave of social problems”

• Council tax changes could leave poorest households £200 worse off
• Postcode lottery across Yorkshire and Humber

Charities across Yorkshire and Humber are predicting a wave of social problems as new analysis reveals how much extra poorest households will have to pay towards council tax.

Involve Yorkshire & Humber (1) is today releasing figures estimating that nearly 240,000 people previously exempt from paying council tax will be faced by bills of up to £200 - some will pay more (2).

In a survey answered by more than 250 charities across Yorkshire and Humber this month, the majority of respondents said council tax benefit changes would have a greater impact on communities than any other welfare reform (3).

The changes follow the Government scrapping its national council tax benefit scheme as part of its welfare reforms. Instead, local councils have been told to design and run their own schemes from April - but with only 90% of the cash previously spent on council tax benefit. The Government has said councils cannot remove council tax benefit from pensioners, but can ask working age households to pay more, leaving councils with tough choices on how to make up the shortfall.

Councils across Yorkshire and Humber have adopted various schemes (4). Individuals previously exempt from council tax will be asked to pay 30% of the full bill in York, 23% in Sheffield, 8.5% Hull. For individuals living on their own in the cheapest properties this could mean annual bills of £211 in York, £171 in Sheffield and £58 in Hull.

For couples or families and those in larger properties the bills could be much higher. For instance a family living in a Band D property in Wakefield could be facing a new bill of nearly £400 a year (5).

Three councils - Harrogate, Doncaster or Calderdale - are making savings elsewhere to protect all current council tax benefit recipients.

Charities across Yorkshire and Humber have told Involve, which reaches into more than 15,000 voluntary and community organisations in the region, that they fear debt and homelessness could spiral as squeezed households struggle to meet the new costs.

Mark Gamsu, Trustee at Involve Yorkshire & Humber said: "The clear message from charities across Yorkshire and Humber is that homelessness, use of food banks and debt are already going up. If you take more out of people’s pockets it will inevitably get worse.”

Julie Burnham is Manager of Wakefield Rent Deposit Scheme, where the council ties with York in asking for the greatest proportion of council tax from previously exempt households. She said: “This change alone will on average cause incomes for those receiving basic Job Seekers Allowance to fall by about £5/week, that’s a 7% drop in income for single homeless clients finding accommodation in Wakefield.  We anticipate that marginalised and socially excluded clients will suffer additional financial hardship, and that debt and homelessness in Wakefield will increase.  We are already experiencing increased demand for the additional food and other resources that WRDS provides for clients, and anticipate that this demand will increase significantly after April. At a time when all budgets are stretched, we can only hope that the donations to WRDS in support of this work will continue.”

Ends

Contact

Jenny Westaway, Communications Manager, Involve Yorkshire & Humber 0113 394 2302 or 07939 431 129 or jenny.westaway@involveyorkshirehumber.org.uk

Notes to editors

(1)    Involve Yorkshire & Humber supports the voluntary and community sector to create a strong society and fair communities, with opportunities for all, throughout Yorkshire and the Humber. www.involveyorkshirehumber.org.uk

(2)   From 1 April 2013 Council Tax Benefit (CTB), which currently pays up to 100% of council tax bills for low-income households, will be abolished and replaced by Council Tax Support (CTS). As part of the reform, English local authorities have to devise their own schemes of CTS. This means a move from one national system to 326 in England and 21 across Yorkshire and Humber.

All councils will have 10% less funding for CTS than they did under CTB. They are required by central government to provide the same level of support to pensioners as under CTB, so any cut in support falls entirely on working-age recipients.

According to data from the Department of Work and Pensions, there 544,230 individuals were receiving council tax benefit in Yorkshire and Humber in October 2012. Using national averages, Involve Yorkshire and Humber has calculated that approximately 269,700 of these are individuals of working age who formerly were entirely exempt from paying council tax, having 100% of their bill covered by CTB across the region. In three authorities, Calderdale, Doncaster and Harrogate, they will continue to be protected, bringing down the number of people previously exempt who will be asked to pay this year to 238,509. However, it is worth mentioning that seven local authorities in the region will specify vulnerable groups that will be possibly protected to an extent with regards to their council tax invoice (beyond the government decision regarding exemption of pension age claimants) and therefore this represents an approximation of the exact number of claimants that will be affected by the new policies in the region.

(3) Involve Yorkshire & Humber sent a questionnaire to approximately 2,500 voluntary and community organisations across Yorkshire and Humber in March 2013 to ascertain levels of knowledge and expectations of the impact of welfare reform. Over two weeks, 264 responses were received.

(4) The table below shows estimates for the amounts that individuals of who were previously exempt from council tax will be asked to pay from April 1 2013 in authorities across Yorkshire and Humber. We have listed estimated charges for individuals living alone (and therefore receiving a 25% sole occupancy discount). We have relied on research from the New Policy Institute for details of the local schemes. (https://docs.google.com/spreadsheet/ccc?key=0AopFtKCc6AeYdGthZnJ0enpnb1dYa0NPZkYzdnVWNEE#gid=0 ). Our calculations are based on Band A charges, using figures from official council sources where available or calculated as an average council tax for the specific band in all parishes. The list of sources for these figures is available from the authors on request.

(5)   Involve Yorkshire & Humber can also supply figures for estimated charges for larger households in more expensive properties.