Council tax support grant extension needed, says LGA

The Local Government Association has warned that rising numbers of families on low incomes face paying more council tax from April without an extension to one-off government funding for local council tax support schemes.

Figures show that more than 2.5 million working age people across England claimed a discount on their council tax between April and June this year, which is the highest number since records began in 2015.

The government has provided £670 million to councils in this financial year to help them provide discounts to households struggling to pay their council tax bills because of the pandemic. However, the LGA is calling on Chancellor Rishi Sunak to use this month’s Spending Review to continue the grant for the next three years. Without an extension, council leaders are warning that councils will be unable to provide council tax support to all those in need.

Since 2013, councils in England have been running their own local schemes to help economically vulnerable households with council tax bills after the national benefit was abolished. However, the funding government has given to councils to fund these schemes reduced by around half between 2013 and 2020.

The LGA said the Spending Review also needs to provide an effective long-term solution to preventing poverty and disadvantage that moves away from providing crisis support towards improving life chances and building resilience. The Spending Review also presents an ideal opportunity to fully restore core, separately identified funding of at least £250 million each year for wider local welfare provision to ensure that all communities are fairly and effectively supported throughout recovery and beyond.

Shaun Davies, chair of the LGA’s Resources Board, said: “Councils know how tough things are for many low-income working households who are already concerned about potential income losses and the cost of living. Record numbers are claiming a discount on their council tax due to the pandemic and one-off government funding has been crucial to help councils provide vital support for those struggling to pay this year.

“No council wants to ask those on the lowest incomes to pay more. Faced with severe funding and demand pressures that continue to stretch local services to the limit, many councils will have little choice but to reduce discounts without an extension to this government grant beyond this year. The Spending Review needs to provide councils with the full amount of funding required to provide council tax support to those who need it over the next few years to avoid bills being forced up for those who can least afford to pay.”