TENS of thousands of households are facing a council tax bill shock as local councils slash vital support.
Over the past few weeks, several councils have confirmed they are reducing the support they offer or will remove certain discounts to cover gaps in funding in 2025/26.
It comes as some local authorities have asked to hike council tax by unprecedented levels of up to 25% next year as they warn they face bankruptcy without the extra cash.
It means that some households will pay council tax for the first time or have discounts cut, pushing vulnerable into further difficulty, experts warn.
Emily Whitford, Senior Public Policy Advocate and author of StepChange’s council tax research, Looking through the keyhole, said the debt charity has seen evidence that reducing support has pushed more people into council tax arrears.
“Council tax has become an increasingly unaffordable burden for many StepChange clients – with council tax arrears now at an average of over £1,900 per client, up by 70% since before the pandemic,” she said.
“The need for comprehensive council tax support for households on the lowest incomes is crucial to avoid worsening debt and bailiff action.
“Yet our research, published last year, found that one in five clients who fell behind on council tax payments had their council tax support reduced in the six months prior.
“The planned hike in council tax bills from April, coupled with a reduction in the support available to low-income households, will likely push those already in precarious situations into further difficulty.
“It’s absolutely vital that the Government, as a priority, ends the postcode lottery of council tax support by increasing funding so that 100% reductions can be re-established for those on the lowest incomes.”
What changes are being proposed?
Slough Council, Waltham Forest Council, Somerset Council, Nottingham City Council and Sutton Council are some areas preparing to slash support offered to low-income households this year.
Dudley Council
Dudley Council in the West Midlands is consulting on increasing the minimum amount people getting a reduction must pay to 60%.
It is currently awaiting approval from the cabinet before being put before the council.
Councillor Steve Clark, cabinet member for finance, said: “As we work to finalise the budget for the next financial year, we are taking difficult decisions to make the necessary savings of just under £42 million.”
London borough councils
A number of councils around Greater London have warned they need to reduce support as they struggle financially.
In mayoral documents published this week by the Greater London Authority, it said thousands of households around the Capital could be forced to pay council tax for the first time next year.
“Under the case studies provided as part of borough consultation proposals, the lowest income working age households could see increases in the sums they are required to pay,” the documents say.
“In some boroughs, households currently making no contribution could be required to pay up to 35% of their liability – this is likely to include those occupied by vulnerable groups such as carers, lone parents with children under five, and those on disability benefits.
“In boroughs where 100% support is not currently offered, the lowest income households could be required to pay up to 50% of their council tax bill from April 2025, compared to 20-30% currently.”
Councils at risk include Waltham Forest Council, which confirmed thousands of residents will no longer be eligible for any support following a vote last month.
Low-income households previously paid as little as 15% of their council tax, but from April they will pay as much as 43%.
Cllr Grace Williams, leader of Waltham Forest Council, said: “We recognise that people are still struggling, but the scale of financial challenges the Council faces means making some really difficult decisions so we can continue to run vital services for residents across the borough.”
Sutton Council is also planning to make some of its poorest pay for the first time by removing the 100% exemption so that “every household pays at least 5% council tax, including those out of work and on a disability benefit”, according to council documents.
Nottingham Council
Nottingham Council is planning to implement several changes to its council tax support scheme from April, including:
- reducing the maximum level of support to 80% of their council tax liability
- changing the maximum level of council tax support to be based on a band B property, so those in larger properties will have to make up the difference
- increasing the minimum weekly award will to £5 per week, up from 50p per week – expected to impact 568 households
- A minimum income floor will be introduced for self-employed applicants.
A consultation on the changes took place between October and December last year and the council said it had “taken on board the views and comments”.
Around 19% of Nottingham City Council’s households get some form of council tax support, equating to around 23,964 households.
Council Leader, Cllr Neghat Khan, said: “Following the consultation, a recommendation is being made to the Council’s executive board that the scheme continues to provide a maximum amount of 80% support for working age claimants.
“This will ensure that eligible low income households continue to get the level of support they need. Minor changes are being proposed which will provide savings and make administering the scheme more efficient.”
Slough Council
Slough Council in Berkshire is reducing its maximum level of support from 100% to 80%.
This would affect 1,019 households which currently receive the full 100% discount, meaning they would have to pay council tax for the first time.
However, it is also proposing to double its hardship fund from £175,000 to £350,000 in 2025/26 using its Household Support Fund resources to help those most in need.
The final decision will be made this week at a cabinet meeting and it will then be implemented from April.
Councillor Mabu Shaik, lead member for I.T customer services, revenue and benefits, procurement and performance, said: “Ultimately, we need to run a scheme which is viable and affordable in the future, but which also offers targeted support to households on the lowest income.
“Being able to increase the amount of money available through the Council Tax Support Hardship Fund is good news and would be for those who need exceptional support.”
Somerset Council
Somerset Council has confirmed it will make a raft of tweaks to its discounts to help raise around £3.88million following a public consultation.
Around 12,600 low-income households are expected to pay more council tax under the changes, the council said.
These include:
- Reducing support for working-age applicants to save £2.3million: The lowest income homes will still get a 100% discount, but this will now be tapered to 50%, 25% and 10% depending on weekly earnings
- Introducing a non-dependent deduction to save £1.5million: council will introduce a flat rate deduction of £10 per week for every non-dependent living in the home, eg. adult children
- Restricting support to Band D council tax levels: restricting support to Band D Council Tax levels (£86,000) and above, so people living in larger or more expensive houses would pay more council tax – to save £86k.
- Restricting the backdating of council tax reduction to three months, down from 12 months.
Cllr Liz Leyshon, Somerset Council’s lead executive member for resources, said: “We have had to consider many heartbreaking decisions in response to the financial emergency and there are few more difficult than this.
“We’ve listened to the public feedback and have taken steps to protect many of the discounts on offer.
“We are committed to supporting our most vulnerable residents and that is why we are proposing to keep the 100% discount for those most in need and working to ensure our residents receive the maximum support to which they are entitled.”
What council tax support is available?
THERE are several ways you can get discounts and reductions on your council tax bill.
In some cases, you can even get the bill completely wiped with a council tax reduction.
Factors such as your household income, whether you have children, and if you receive any benefits, will influence what you get.
To apply, visit https://www.gov.uk/apply-council-tax-reduction.
You’ll need your National Insurance number, bank statements, a recent payslip or letter from the Jobcentre, and a passport or driving licence when filling out the details.
Below, we reveal all the ways you can get discounts or a reduction on your bill:
Single person discount
If you live on your own, you can get 25% off your council tax bill.
This also applies if there is one adult and one student living together in a property, or if there is one adult and one person classed as severely mentally impaired in the home.
If you live with someone who doesn’t have to pay council tax, such as a carer or someone who is severely mentally impaired, you could get a larger reduction too, of up to 50%.
And, if you live in an all-student household, you could get a 100% discount.
Retirees
Pensioners may also find themselves eligible for a council tax reduction.
If you receive the Guarantee Credit element of Pension Credit, you could get a 100% discount.
If not, you could still get help if you have a low income and less than £16,000 in savings.
And a pensioner who lives alone will be entitled to a 25% discount too.
Low-income households
If you are on a low income or receiving benefits, you could be eligible for a reduction on your council tax.
Whether you are eligible will vary depending on where you live.
You could also get a deferral if you’re struggling to pay your bill, or you can speak to your council about setting up a payment plan to manage the cost.
But one thing to remember is if you are struggling you should contact your council as early as you can.
