In poorer households, the cost of living shot up in April 2013 when the government abolished Council Tax Benefit (CTB) and replaced in with localised council tax support schemes, known as Council Tax Reduction.
Under the old, nationwide CTB system, people who claimed Income Support, Employment Support Allowance or Job-Seekers Allowance were automatically entitled to CTB and received a full council tax rebate. Others on low incomes were means-tested and paid a proportion of the council tax up to a 100 per cent rebate, according to their income.
Local authorities were fully reimbursed by central government for the total amount of council tax unpaid by households receiving CTB.
In April 2013, central government cut council tax support funding by 10 per cent, insisted on localised support schemes and ring-fenced full rebates for pensioners on low incomes.
The cut in support funding, combined with retaining CTB for pensioners, in effect, means that councils have received an average 19 per cent cut in funding for council tax support. In local authorities with a higher than average number of pensioners on low incomes, the cut in the support grant will be deeper and vice versa.
Most councils have decided to pass on the cut to their residents, with some exemptions for vulnerable groups - people with disabilities, for example. This means that many people on low incomes are having to pay council tax for the first time, or are being asked to pay an increased amount.
The effects of localised council tax support in London are stark. Most councils have decided to pass on the cut to their low-income residents, meaning households are paying between 5 and 22 per cent of the full Council Tax. Many have already fallen into arrears.
In Southwark, around 9,000 residents have been summonsed to court for non-payment of council tax under the new system. In Haringey, 5,082 householders who previously did not pay council tax have been issued with liability orders. In Brent, the figure is 3,300. Some of these people may owe sums as small as £50 - a summons adds £65 to the debt.
To join Unite Community’s Restore 100% CTB campaign, contact Pilgrim Tucker on 07970 126249 or by email