Bills will rise by up to £600 a year for some struggling households, according to research by thinktank
Three-quarters of local authorities in England plan to put up council tax for the poorest households, often by hundreds of pounds, new research reveals.
From April local authorities in England will take control of a previously national scheme of subsidies for the hardest up families, usually with no working adults or those working on the minimum wage – at the same time as funding for the scheme is cut by 10%.
The Resolution Foundation thinktank surveyed councils and found that while some planned to make savings from other budgets, 74% said they would have to make households that did not previously pay any council tax start paying some of the bill, and/or reduce discounts to low-income working households.
In the worst cases, bills will rise by £600 a year, says the Resolution Foundation.
“Millions of England’s poorest households are already very close to the edge given falling wages, tax credits and benefits,” said Gavin Kelly, the foundation’s chief executive, warning most of those would “find it hard to cope” when the bills arrived. “The new system will result in hard-pressed councils spending scarce resources chasing some of the poorest people in the country for non-payment.”
Meanwhile, Iain Duncan Smith is to announce on Thursday that drug and alcohol addiction, family breakdown, going to a failing school and living in a home with no working adult could all be included in a future measure of child poverty.
The work and pensions secretary’s proposal follows research by his department showing the biggest indicator of child poverty identified by members of the public was not income but having a parent addicted to drugs or alcohol – backing up the former Conservative leader’s long-held argument that the current financial-based measure alone is not enough.
To further strengthen his argument he will also announce that 300,000 children were officially lifted out of child poverty last year – but this was “largely” due to a fall in median income, the benchmark for measuring the problem.
The old income-based target, which says a child lives in poverty if the household has 60% or less of the national median income, will continue alongside a new “multidimensional” measure.
“Nothing shows more clearly how far off-course the current measure has taken us, and why we need a new measure – one which both identifies those most in need and entrenched in disadvantage, and is widely accepted as being meaningful and accurate,” he will say in the speech on Thursday, extracts of which were released on Wednesday night.
Amid growing criticism that ministers do not understand how far they are driving families into financial difficulty, Downing Street on Wednesday suggested nobody should need to use food banks, which are expected to help 230,000 people this year.
A Number 10 source said: “If people have short-term shortages, where they feel they need a bit of extra food, then of course food banks are the right place for that. But benefits are not set at such a low level that people can’t eat.”