The wrong reform - at the worst possible time

 

Share
Related Topics

Britain’s poorest households - already struggling to cope with falling wages, rising living costs, and a series of cuts to tax credits and benefits - are about to receive another blow. And very few of them know it’s coming.

Within weeks they will receive an unexpected council tax bill in the post. Many will assume it is a mistake.  Not surprisingly those providing debt advice, as well local MPs, are bracing themselves for a surge of concern and complaint.

The reason for this is an impending change to council tax benefit. The Government is cutting the amount spent on helping those on the lowest incomes by 10 per cent at the same time as it is transferring responsibility for administering support to local councils.

Centrally-set rules mean that councils will protect all pensioners leaving them with a stark choice: either substantially increase the bills of the working-age poor who currently receive council tax benefit or find the savings elsewhere from already shrinking budgets. In political terms it amounts to the decentralisation of blame and pain.

Today’s Resolution Foundation report reveals that faced with this invidious choice three-quarters of English councils are set to introduce less generous systems of council tax support. Over a third of these are planning to introduce schemes that charge affected households an extra 20 per cent of the total bill. Harsher still, many councils will for the first time include child benefit in their calculations of a family’s income, meaning that those with children will face the biggest hikes. Only around a quarter of English councils feel able to absorb the funding shortfall within other budgets as the Scottish and Welsh administrations are doing. 

It is a policy with few redeeming features. It is punitive on the poor. It will be fiendishly complex, hard to administer and end up in hard-pressed councils chasing non-payment from some of the poorest households in the land. It’s also likely to result in significantly larger bills in 2014 than this year. And, perhaps most surprisingly, it undermines the goal of universal credit – the Government’s own flagship welfare reform – by increasing the effective tax rates of those on low pay.

If recent history has taught Whitehall anything, it is to tread very carefully when it comes to introducing local property taxes on the poor.  There are other ways for the Government to find the savings it is seeking:  our regressive system of council tax is ripe for a new top band raising revenue from the most expensive properties. This is the wrong reform made at the worst of times.

Gavin Kelly is chief executive of the Resolution Foundation think tank

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Savvy Media Ltd: Media Sales executive - Crawley

£25k + commission + benefits: Savvy Media Ltd: Find a job you love and never h...

Austen Lloyd: Corporate Solicitor NQ+ Oxford

Excellent Salary: Austen Lloyd: CORPORATE - Corporate Solicitor NQ+ An excelle...

Reach Volunteering: Financial Trustee and Company Secretary

Voluntary Only - Expenses Reimbursed: Reach Volunteering: A trustee (company d...

Recruitment Genius: Senior Project Manager

£45000 - £65000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

Read Next
Muslim men pray at the East London Mosque  

Sadly, it needs to be said again: being a Muslim is not a crime

Yasmin Alibhai Brown
Mau Mau uprising: Kenyans still waiting for justice join class action over Britain's role in the emergency

Kenyans still waiting for justice over Mau Mau uprising

Thousands join class action over Britain's role in the emergency
Isis in Iraq: The trauma of the last six months has overwhelmed the remaining Christians in the country

The last Christians in Iraq

After 2,000 years, a community will try anything – including pretending to convert to Islam – to avoid losing everything, says Patrick Cockburn
Black Friday: Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Britain braced for Black Friday
Bill Cosby's persona goes from America's dad to date-rape drugs

From America's dad to date-rape drugs

Stories of Bill Cosby's alleged sexual assaults may have circulated widely in Hollywood, but they came as a shock to fans, says Rupert Cornwell
Clare Balding: 'Women's sport is kicking off at last'

Clare Balding: 'Women's sport is kicking off at last'

As fans flock to see England women's Wembley debut against Germany, the TV presenter on an exciting 'sea change'
Oh come, all ye multi-faithful: The Christmas jumper is in fashion, but should you wear your religion on your sleeve?

Oh come, all ye multi-faithful

The Christmas jumper is in fashion, but should you wear your religion on your sleeve?
Dr Charles Heatley: The GP off to do battle in the war against Ebola

The GP off to do battle in the war against Ebola

Dr Charles Heatley on joining the NHS volunteers' team bound for Sierra Leone
Flogging vlogging: First video bloggers conquered YouTube. Now they want us to buy their books

Flogging vlogging

First video bloggers conquered YouTube. Now they want us to buy their books
Saturday Night Live vs The Daily Show: US channels wage comedy star wars

Saturday Night Live vs The Daily Show

US channels wage comedy star wars
When is a wine made in Piedmont not a Piemonte wine? When EU rules make Italian vineyards invisible

When is a wine made in Piedmont not a Piemonte wine?

When EU rules make Italian vineyards invisible
Look what's mushrooming now! Meat-free recipes and food scandals help one growing sector

Look what's mushrooming now!

Meat-free recipes and food scandals help one growing sector
Neil Findlay is more a pink shrimp than a red firebrand

More a pink shrimp than a red firebrand

The vilification of the potential Scottish Labour leader Neil Findlay shows how one-note politics is today, says DJ Taylor
Bill Granger recipes: Tenderstem broccoli omelette; Fried eggs with Mexican-style tomato and chilli sauce; Pan-fried cavolo nero with soft-boiled egg

Oeuf quake

Bill Granger's cracking egg recipes
Terry Venables: Wayne Rooney is roaring again and the world knows that England are back

Terry Venables column

Wayne Rooney is roaring again and the world knows that England are back
Michael Calvin: Abject leadership is allowing football’s age-old sores to fester

Abject leadership is allowing football’s age-old sores to fester

Those at the top are allowing the same issues to go unchallenged, says Michael Calvin