Council tax tops credit cards for pushing Britons into the red
Welfare changes blamed as figures from Citizens Advice show rise in those seeking debt advice
Emily Dugan is social affairs correspondent for The Independent, i and Independent on Sunday. She was previously a news reporter for The Independent on Sunday. Her investigations into human trafficking have twice been awarded Best Investigative Article at the Anti-Slavery Day Media Awards and her human rights journalism was shortlisted for the Gaby Rado Memorial prize at the 2012 Amnesty Media Awards.
Monday 26 May 2014
The number of people struggling with their council tax payments has “rocketed” following the introduction of the Government’s welfare reforms, figures from Citizens Advice show.
Council tax arrears are now the most-common problem plunging people into debt, with one in five approaching the charity in England and Wales behind in their payments. Until this year, credit card and unsecured personal loans were the most-common types of debt reported to Citizens Advice.
The surge in council tax debt problems follows the Government’s changes to support for those on low incomes. Under new, localised council-tax support schemes introduced in April 2013, many on benefits and very-low incomes have to pay the tax for the first time, or fork out a higher rate.
In the first three months of this year, 27,000 people went to Citizens Advice with a council-tax arrears problem, a 17 per cent increase on the same period last year. Councils can use bailiffs to get the money or even force people into bankruptcy.
Hilary Benn, shadow Secretary of State for Communities and Local Government, said: “These figures show exactly why the architect of the original poll tax, Patrick Jenkin, warned that what the Government was doing would be a poll tax mark two. Combined with the bedroom tax, these changes have pushed those on the lowest incomes into debt – including the disabled, carers and war widows – and they now face summonses, bailiffs and court hearings.”
Every council in England now has its own support scheme and three-quarters of them – 244 of 325 – require all working-age claimants to make at least a minimum contribution to their council tax bill. This includes those solely reliant on benefits who used to be exempt.
People in Wales and Scotland have largely been protected from the changes as national schemes were set by the Welsh Assembly and Scottish Parliament that are very similar to the old council-tax benefit. Northern Ireland is not currently affected by these changes.
Citizens Advice chief executive Gillian Guy warned that council tax bills were a tipping point for some households that could send them into debt.
“Last year over 90,000 people came to Citizens Advice looking for help with council-tax arrears as they struggle in the face of low incomes, rising prices and reduced financial support,” she said.
“Consumer debts like credit cards and personal loans have traditionally been the most-common debt problems that come through our doors, but since the end of council tax benefit we’ve seen council tax arrears problems go through the roof.”
Many of those struggling with council tax payments also had other debts. One-in-six also had a credit or store-card issue, one-in-five also had a problem with an unsecured personal loan and 5 per cent had mortgage arrears.
Local Government Minister Brandon Lewis, said: “This Government has delivered an 11 per cent real-terms cut to council-tax bills for hard-working families across the country.
He added: “Latest official annual figures show arrears are falling and collection rates across the country now stand at 97.4 per cent.
“Council-tax benefit doubled under the last administration costing every household £180 a year so welfare reform is a vital part of reducing the inherited deficit.”
- 1 I was a Woman Against Feminism too
- 2 Students offered grants if they tweet pro-Israeli propaganda
- 3 The Tory donor whose firm is one of Britain’s biggest tax avoiders - with HMRC's blessing
- 4 John Barrowman praised for Commonwealth Games opening ceremony gay kiss
Peaches Geldof cause of death: Socialite had taken fatal dose of heroin after years of addiction, inquest concludes
Vladimir Putin employs a full-time food taster to ensure his meals aren't poisoned
Peaches Geldof: Her final day – and her fatal decision
Israel-Gaza conflict: Israel may have committed war crimes, says UN human rights chief
John Barrowman praised for Commonwealth Games opening ceremony gay kiss
Malaysia Airlines MH17 crash: Vladimir Putin is given 'one last chance' to end hostilities in Ukraine
The 'scroungers’ fight back: The welfare claimants battling to alter stereotypes
The truth about conspiracy theories is that some require considering
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: Massive rise in sale of British arms to Russia
Malaysia Airlines MH17 crash: victims’ bodies bundled in black bags and loaded onto trains
£30000 - £38500 Per Annum + 25 days holiday, pension, subsidised restaurant: C...
£34000 - £37000 Per Annum + excellent benefits: Clearwater People Solutions Lt...
£40000 - £45000 per annum + Pension, Holiday, Flexi-time: Progressive Recruitm...
£280 - £320 per day: Progressive Recruitment: C#, WinForms, Desktop Developmen...