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Council tax shake-up punishing poor people, MPs warn
POOR people are being punished by a controversial shake-up of council tax, a committee of MPs warns today (Tuesday, March 11)
The disabled, low-paid, carers and jobless have all been hit by new rules requiring them to pay about 20 per cent of the levy, the powerful Public Accounts Committee (PAC) finds.
Its report warns the Government’s promise - that “vulnerable people” would not suffer from the axing of council tax benefit – has been broken.
And it calls on ministers to urgently draw up a “coherent set of guidelines” for town halls that threaten the stated objectives of the policy.
Margaret Hodge, the PAC’s Labour chairman, said: “Local authorities were tasked with protecting vulnerable people such as poorer families, despite the fact that savings had to be made.
“However, 133 local authorities offered no protection to vulnerable groups, other than pensioners and war pensioners.”
Among those 133 councils are several in the North-East, including Darlington, Stockton-on-Tees, Middlesbrough and Redcar and Cleveland.
They all imposed a 20 per cent minimum charge on working-age adults, after the Government slashed funding by ten per cent.
The rules came in after across-the-board council tax benefit was replaced by 230 different support schemes that town halls were told to draw up.
Durham County Council kept its 100 per cent discounts, while Hartlepool, plus Hambleton and Richmondshire, in North Yorkshire, asked for 8.5 per cent of the full charge.
Now today’s report has found that:
* The Government has failed to collect detailed information about local schemes and “their impacts on vulnerable groups”.
* The shake-up is failing to increase ‘work incentives’ in most areas – and have made it less worthwhile to go to work in some.
* Councils have been short-changed because extra Whitehall grants fail to cover the increased cost of collecting council tax from poor people.
* Ministers have failed to set out how councils will adapt their support schemes when the new Universal Credit is introduced, by 2017.
Ms Hodge added: “For some, work simply doesn’t pay under the new scheme. For them, work incentives have actually weakened rather than strengthened – the opposite of what the Government intended.”
The Institute for Fiscal Studies found that inquiries to Citizens Advice Bureaux have rocketed where the poorest now pay some council tax.
And The Northern Echo revealed the changes had left more than 10,000 of the region’s poorest households facing legal action for non-payment.
But Brandon Lewis, the local government minister, rejected the report’s findings – insisting the changes were “fixing the welfare system and reducing the deficit”.
"Spending on council tax benefit doubled under the last Government costing taxpayers £4bn a year – equivalent to almost £180 a year per household.”
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