Council tax debt levels have ìrocketedî, says Citizens Advice
Council tax debt is now the most common financial issue that UK inhabitants are faced with, as the number of people in arrears with their local authorities has ìrocketedî, a leading charity has identified.
The Citizens Advice aided 27,000 individuals who were struggling with council tax debt between January and March this year- representing a 17% rise compared to the same period a year before.
The reported increased comes after council tax benefit reforms were instigated in April 2013, with the effects of the policy since its implementation polarising opinion across public and political forums.
Local government minister Brandon Lewis argued that the benefit changes are a ìvital partî of reducing the UKís substantial public deficit, which the coalition government has persistently reiterated is their primary concern at present, despite the hardship that some have endured as a consequence of them relentlessly pursuing this aim.
The reform to the council tax benefit was one part in a series of welfare changes, and involved the old benefit entitlement being replaced by the new council tax support scheme, which has seen sovereignty to allocate welfare payments given to local authorities rather than officials from Whitehall.
The government also slashed the budget for the scheme by 10%, equating to a cut of £414 million, arguing that the old council tax benefit had been costing taxpayers a staggering £4 billion each year.
Local authorities have now been given access to the reduced government funding, which they are free to use to instigate their own council tax support schemes.
However, the Citizens Advice has argued that the devolution in power to allocate council tax benefit payments has resulted in widely fluctuating levels of help being given to individuals from ìone council to the nextî, which has meant that across the UK, council tax arrears has ascended to become the ìnumber one debt problemî for householdís in the UK.
It reported that 20% of individuals who had contacted them in 2014 to help them with financial difficulties had done so due to council tax related issues and highlighted that the number of people reporting council tax arrears since the welfare changes were made last April had ìrocketedî.
The Citizens Advice has now urged local authorities to make sure council tax support schemes are make accessible to the families and people who were ìmost in needî, stressing the importance of ensuring this manifests in reality by pointing out that council tax debt is often the ëtipping pointí which ëplunges them into debtí.
"For some households council tax bills can be the tipping point that plunges them into debt," Gillian Guy, chief executive of Citizens Advice said.
"Consumer debts like credit cards and personal loans have traditionally been the most common debt problems that come through our doors, but since the end of council tax benefit we've seen council tax arrears problems go through the roof.
"As their budgets shrink local authorities are increasingly stretched, but they must ensure that the resources available for their local council tax support scheme are focused on those who are most in need."
ëVital part of reducing deficití
Despite the Citizen Adviceís disclosures overwhelmingly suggesting that the governmentís council tax reforms have negatively impacted the finances of families and householdís across the UK, local government minister Brandon Lewis has argued that it has succeed in achieving an 11% real-term reduction in the amount people are having to pay on their council tax bills.
"Council tax benefit doubled under the last administration costing every household £180 a year so welfare reform is a vital part of reducing the inherited deficit.
"Locally-designed council tax support gives councils stronger incentives to cut fraud and support people to get back into work," he said.
Citizens Advice identified that 42% of the individuals who contacted them for help with their council tax payments between January and March this year were in employment, compared to 28% who were not and 30% who were currently not working due to poor health, parental obligations or retirement.
Citizens Advice said 42% of people who asked it for help between January and March with council tax arrears were employed, compared with 28% who were unemployed and 30% not working due to ill health, caring responsibilities or retirement.
Salford, Stoke on Trent, Rutland and Redcar & Cleveland were all identified as the areas with the highest number of council tax arrears, based on the number of people residing from these places who asked for help from the Citizens Advice in the past year.
This is not the first time that the governmentís council tax benefit changes have been thrust into the spotlight, with another major charity, StepChange, reporting earlier this year that they had experienced a 77% rise in the quantity of individuals calling them up in need of help addressing their council tax arrears.
Evidently, the new council tax support schemes are failing to help local inhabitants deal with their council tax obligations, and this can only be down to underfunding from the Treasury or mismanagement of the funds by local authorities.
Whilst the government will always point to the impact the welfare changes have had on reducing the massive public deficit as a clear indicator of its success, they will need to further reform the council tax benefit system in order to optimise its effectiveness and ensure that help is given to the people who actually need it.
The reality is that council tax debt is now a huge problem in the UK, and with household debt already so high from unsecured loans and mortgages, the last thing homeowners need is even more money being taken out of their wages from an obligation that should only be levied upon those who can afford it.
The government will either have to put more pressure on local authorities to be proactive with the funds available to them, or will have to assume a more prominent role themselves, because at present, local inhabitants are not being given the support they need to pay their council tax, and this has resulted in a huge surge in the number of people in arrears- an unacceptable effect of a highly controversial series of reforms