Proposals to overhaul the local Council Tax Support scheme don’t go far enough to help East Devon’s poorest and will leave ‘the working poor much worse off’.
That is the view of Tiverton and Honiton Constituency Labour Party, which says a proposal by East Devon District Council to reduce the amount the poorest pay by five per cent will offer no relief to those really struggling.
It has described the suggested 15 per cent contribution as a ‘burden’.
The party’s constituency secretary, Adam Powell, points out that up until 2013 the people being hit hardest now did not have to pay council tax at all.
Since then council tax bills have risen by 24 per cent, while wages only increased by 11 per cent, he points out.
East Devon District Council runs a local scheme that supports people on low incomes and with little or no savings.
The district council is considering introducing an income banded discount scheme with four bands – 85 per cent, 70 per cent, 50 per cent and 25 per cent.
A public consultation will be undertaken before any changes to the existing scheme are made.
The proposals state income thresholds would be linked to what the Government says people need to live off, such as £73.10 per week for a single adult over the age of 25.
Another consideration will be household type. The proposals aim to support work incentives and will still include some exemptions. However, they also suggest a reduction in the amount of savings a claimant can have in order to qualify – from the current £8,000 to £6,000.
The full proposals can be read here.
In a report presented to the council’s Cabinet, it was stated: “We have always recognised that we would need to change our scheme once customers started to move onto UC (Universal Credit) as we would no longer be able to ‘piggy back’ CTR (council tax reductions) on HB (Housing Benefit).”
The idea of introducing an income banded discount scheme for 2020/21 was first mooted in 2018.
Pensioners protected in nationwide scheme
Pensioners are protected by a nationwide scheme and the Ministry for Housing, Communities and Local Government says there is no nationally specified minimum level of council tax support for working age people.
Labour says asking those with very little money to pay even a small amount towards council tax can leave people struggling.
In a statement sent to East Devon News.co.uk, the constituency secretary said: “This is leaving the working poor much worse off in real terms, and those on welfare whose incomes have been slashed by the introduction of Universal Credit, suffering an even greater financial strain.
“This new move makes last week’s report on poverty, which is at its worst in Honiton, Seaton, Sidmouth and Exmouth, look like mere political posturing.
“Cllr Mike Allen’s report, which called to embed poverty proofing into all council policies, acknowledged that poverty is not only about low income, but also high unavoidable costs. The disabled, carers, families with children and the poor generally pay more for instance by using public transport, paying interest on emergency loans and metered electricity.”
Mr Powell added: “To ask anything from individuals with incomes less than £75 per week, or even £150 per week, which is just below the pension rate, seems ridiculous.
“The gain to the council is small, and often costly to collect. Clearly this policy would make the very poor even poorer.”
Mr Powell also pointed out the proposal to lower the capital limit for relief by £2,000 was likely to harm those working as self-employed sole traders.
“These strivers may well need reserves over £6,000 to buy stock, and the council must find a way to make reasonable accommodations for those in business who genuinely need a higher cap,” she said.
Labour proposes to introduce a sliding increase of 20 per cent on band D, and of 100 per cent on band H. Labour wants to give 100 per cent relief where real income – taking account of those in measurable dimensions of poverty – falls below £150 per week, and to offer capital allowances to encourage small sole traders.