How has CTS affected claimants across England?
From April 2013, local authorities across England were given the power to devise their own systems of Council Tax Support (CTS) for working-age adults. It replaced the national system of the Council Tax Benefit (CTB) which ensured that the poorest households did not have to pay council tax.
Each year the local authority decides how CTS should work in their area. Now in its sixth year, 2.0 million low-income families will pay on average £204 more in council tax in 2018/19 than they would have if CTB were still in place, up from £191 in 2017/18, £175 in 2016/17, £167 in 2015/16, £160 in 2014/15 and £145 in 2013/14. Our figures differ slightly from estimates in previous years as the model used to produce them has been updated.
The amount of additional council tax paid has increased by £16 on average between 2017/18 and 2018/19, and the graph below shows that 170,000 working-age claimants are in areas where the minimum payment required increased in April 2018 or has been introduced for the first time. In these areas, the increase for many claimants will be more than £16.
In 2018/19 10 councils removed or reduced their minimum payment. The largest number of councils yet to return to a more generous scheme. As in 2018/19 this change affected people in more than one local authority area we have shown it on the graph in previous years this change is counted as ‘other or no change’.
The graph shows that the total number of working-age CTS claimants has fallen every year since 2013/14. This is largely due to rising employment but some claimants will no longer be entitled to CTS due to a change in their to local scheme rather than a change in their circumstances.
*May not sum due to rounding
The table shows the number of claimants affected in each region and the average hit in each case, relative to what they would have received if CTB were still in place. Regional variation is explained both by changing schemes, variations in the number of properties in each band, and variation in the level of council tax across local authorities. So while the variation in the average hit cannot be explained by schemes alone, it nevertheless shows that someone receiving, for example, jobseekers allowance in some areas would have to pay more council tax than in others. The table shows:
- The average cut in support is greatest in Outer London at £241 and least in the North East at £143.
- The average hit has increased the most since the first year of CTS in the South East, Outer London and the East Midlands.
- The number of claimants affected has increased in the West Midlands since April 2013 but has fallen in every other region.
Range of hit
The average cut in support of £204 in 2018/19 hides a lot of variation. The graph below shows the number of CTS claimants by the additional council tax paid each year compared to CTB.
- The most common financial impact of CTS changes on claimants in 2013/14 (indicated by the tallest bar on the graph) was an additional £50 to £100 per year to pay in council tax than they would have under CTB; in 2017/18 this will be £150 to £200 – as it was in 2017/18.
- Each year the number of claimants paying smaller amounts in additional council tax has fallen and the number paying larger amounts has risen.
Council Tax Arrears
Council tax arrears arise when a resident falls behind with their council tax payments. The way that councils pursue missed payments varies from place to place. The standard procedure is for the council to send two reminders about unpaid council tax before embarking on further collection and enforcement strategies. This may include asking for the entire year’s liability to be paid in one instalment, making an application to the magistrate’s court for a liability order, an attachment of earning or benefits (where the council collects council tax from the household’s income or benefits that the council itself administers). They may proceed with enforcement measures, such as debt collection by bailiffs.
The graph above takes into account the change in the council tax bases between the years to calculate the additional amounts of uncollected taxes in 2016/17 compared with 2012/13 the last year of CTB.
In 2016-17, local authorities would have collected £26.8bn in Council Tax if everyone liable for Council Tax paid in full- within this context, a small percentage point increase in uncollected tax represents a large sum.
The 67 Councils that had a minimum payment of over 20 per cent in 2016-17 had the largest overall increase in uncollected tax for that year. These councils had £48.6 million more in uncollected tax than they did in 2012-13. This group’s arrears this year relative to 2012-13 is £4.2 million more than last year (when only 53 Councils were in this category).
Councils that abolished CTB but did not set a minimum payment saw no significant change between arrears this year compared to 2012-13 (the group overall had an increase of £10,000). Councils that retained CTB continued to have lower arrears this year than they did in 2012-13. This group’s arrears declined by £13.8 million relative to their arrears in 2012-13.
View impacts on a map
Average cut in council tax support in 2018/19 comapred to the previous system for local authorities in England
The estimate of working age adults in the map above does not account for vulnerable groups councils may intend to protect. The figures detail the impact only two measures which councils have introduced: a minimum council tax payment and a band cap. It does not refer to other changes such as a reduction or removal of the second adult rebate, a minimum council tax support payment by the council, a change to the rate at which income is tapered or to the savings limit.