Half a million more people summoned to court over unpaid council tax, after benefits scrapped

Exclusive: Almost three million people taken to court by local authorities in wake of changes to support

Half a million more people were summoned to court last year over unpaid council tax, after benefits protecting low-income families from paying it were scrapped.

Almost three million people in England were taken to court by local authorities in 2013-14 because they had not paid council tax. This was an increase of more than 25 per cent on the previous tax year, according to the figures obtained via Freedom of Information by False Economy, which is brought to you by local campaigners about the cuts and their effects.

The Coalition abolished council tax benefit in 2013, replacing it with a new support scheme administered locally with a 10 per cent smaller budget. The old benefit used to mean that unemployed people or those on very low incomes did not pay council tax, but now most local authorities charge everyone.

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Over two million of the poorest people in England faced rising council tax demands last year (Getty)

The revelation comes as one in seven local authorities are set to further increase the size of cuts to council tax support in the new tax year, which starts this week.

As well as a court summons, those unable to pay council tax face fines, bailiffs and deductions from benefits or earnings. Some could even end up with a criminal record.

Chaminda Jayanetti, a researcher at False Economy, said: “Council tax support cuts have caused chaos for households, and for councils. They are leaving people out of pocket and in debt, which is also bad for local firms depending on them as customers.

“Councils are now pursuing people through the courts for money they do not have. It is a shambles made by a cabinet of millionaires in a government that has been completely out of touch with reality.”

For those eligible for council tax support, many of whom would before have had nothing to pay at all, the annual increase in court summons was more than 400 per cent. 

Councils have to decide whether to charge their lowest-income households or not – but since their budget to cover the tax for the poorest has been slashed by £490m, most do. Of 326 local authorities in England, 244 introduced minimum payments that even the jobless have to pay.

 

Court summonses for non-payment of council tax increased by 30 per cent in local authorities with minimum payments. But the increase was only 9 per cent in local authorities that still provided support for the full council tax bill.

Around 2.5 million low- income households were hit by the resulting council tax rises in the first year of the minimum payment schemes. The average annual cost to those affected by the change is £160 per household, though for some it is several hundred.

The Scottish Government was so opposed to the changes that it paid an extra £40m to wipe out the policy and ensure anyone who previously got council tax benefit would not have to start paying.

The TUC general secretary, Frances O’Grady, said: “Slashing council tax support has been one of the Government’s cruellest cuts. It was foolish for ministers to think families who can’t afford to heat their homes can pay new tax bills for hundreds of pounds.”

A Local Government Association spokeswoman said: “Many councils have introduced hardship funds or have changed the way unpaid tax is collected. Councils will work hard with residents to try to find a way to resolve the situation and only take legal action as a last resort.”

Kris Hopkins, minister for local government, said: “Council tax bills doubled under Labour, and ... council tax benefit soared. Welfare reform has been vital to tackle Labour’s budget deficit.

“Our reforms to localise council tax support now give councils stronger incentives to support local firms, cut fraud, promote local enterprise and get people into work.”

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Of 326 English local authorities, 244 have introduced minimum payments, which mean that even those without jobs or on the lowest incomes pay the tax (Getty)

Who pays council tax? The rules

Council tax benefit used to mean that the poorest in Britain – those on welfare or with very low incomes – did not have to pay.

In April 2013 the Coalition Government replaced this with council tax support, a scheme administered locally with a 10 per cent smaller budget, which freed local authorities to charge the unemployed.

The majority of English local authorities passed on the cut to the poorest working-age households by introducing new minimum council tax payments. Of 326 English local authorities, 244 have introduced minimum payments, which mean that even those without jobs or on the lowest incomes pay the tax.

In Scotland the new policy has been avoided altogether thanks to top-up funding from the Scottish government.

Pensioners were protected from the devolved policy and have been guaranteed the same level of support they would have had under council tax benefit.

Those who live alone or with no other adults can still get a 25 per cent reduction in their council tax bill. Homes consisting of full-time students are exempt from council tax and those with disabilities can be eligible for a discounted rate.

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