Wednesday 4 December 2013

Council Tax Support: 3 days to respond to Brent's 'hidden' consultation

I wrote a little while ago about the hidden away Brent Council consultation on Council Tax support in which the council indicates it wants to continue the present scheme despite the furore over vulnerable residents unable to pay  receiving summonses to Willesden Magistrates Court and incurring extra court charges as a result.

An official complaint is being lodged on the grounds that the consultation has not been well puiblicised (not even to the Citizen's Panel), that it is on-line only making it less accessible to those who it affects because they are less likely to have access to a computer at home, and the very short consultation period. The consultation ends on Friday December 6th.

As one activist said: 'It is almost as if Brent Council doesn't want anyone to respond.'

You can access the consultation here LINK

Meanwhile Zacchaeus 2000 Trust (ZK2 ) LINK has made a response to the consultation.  ZK2000 started as a Christian organisation campaigning against the poll tax.It is s a London-based charity addressing poverty issues caused by unfairness in the law, legal and benefits system.

ZK2000 blogged:
As we have explained previously Z2K is totally opposed to the abolition of Council Tax Benefit and the government’s 10% funding cut, but we also think that local authorities that have tried to make up this funding shortfall by introducing a minimum payment are simply heaping further misery on their poorest residents.

In Brent the minimum payment has led to over 3,500 residents who formerly paid no council tax at all being taken to court with threat of almost £100 in legal fees being added to their debt. In our experience these people aren’t refusing to pay but simply can’t. We believe this just the beginning and expect that many more will start to fall into arrears as rising energy and food prices make their budgets unmanageable.
Here is their submission to the Council's consultation questions:
1. With reference to the 6 key principles listed above, please indicate how important these are to you? (Please rank each area according to importance: 1 being most important and 6 being least important)
Please click the options below in order of preference.
 Principle 1: “Everyone should pay something”
 Principle 2: “The most vulnerable claimants should be protected” (from the minimum contribution)
 Principle 3: “The scheme should incentivise work”
 Principle 4: “Everyone in the household should contribute”
 Principle 5: “Better off claimants should pay relatively more so that the least well off receive greater protection.”
Principle 6: “Benefit should not be paid to those with relatively large capital or savings”

We will rank Principle 2 as number 1 and leave the rest blank.

2. To what extent do you agree or disagree about Brent proposing “No Change” in its CTS scheme for 2014-15, except for including an additional group to be classed as vulnerable (see question 3)?

Z2K strongly objects to Brent’s proposal for maintaining its current CTS scheme. We believe, and our experience supporting Brent resident’s shows, that the minimum payment required by the scheme is pushing some of Brent’s most deprived resident’s further into poverty.

Benefits are supposedly calculated on the basis of providing the minimum necessary to live on, yet they fall far short of Minimum Income Standards (the amount required for a minimum acceptable living standard, for more information see For a single person over the age of 25 the £71.70 weekly Job Seekers Allowance is only 38% of their minimum income standard and for a couple with two children their benefits only provide 58% of what is required for an acceptable standard of living.

This already insufficient income level is being further eroded by the government’s programme of welfare reform. In Brent 1,688 residents have had their housing benefit reduced by the ‘Bedroom Tax’ while 1,177 claimants have been hit by the Benefit Cap. Overall Brent is the local authority worst affected by welfare reform in London and research by Sheffield Hallam University has shown the cuts will result in residents losing £150m.

On top of this councillors have decided to introduce a minimum council tax payment that is amongst the highest in London, only Harrow is charging more (22.5%) and three other boroughs are charging the same amount (Ealing, Hillingdon & Newham). For the vast majority of CTS claimants this minimum payment has to come out of benefits which are already insufficient to provide for the basics of life, and in many cases have already been reduced by other welfare reforms. This means that just under 25,000 Brent residents have been placed in the impossible situation of trying to cut down their food, utility bills or other house essential costs in order to pay their council tax.

Unsurprisingly many have been unable to do so, resulting in almost 3,500 Brent residents being issued with court summons for non-payment of council tax so far this year. Our experience providing advice to some of those summonsed to Willesden Magistrates Court on 5th November and others over the summer demonstrated they are not ‘refusing to pay, regardless of support offered’, as the authority has previously claimed. We found a number of very vulnerable individuals and families who simply couldn’t pay, several of whom were in a state of serious anxiety and visibly distressed by the threat of legal action.

In our opinion these 3,500 summonses are just the beginning. We expect that many of those who have hitherto been managing to meet the minimum payment will start to fall into arrears as rising energy and food prices make their budges unmanageable, particularly as utility bills increase  with the onset of winter and the need to heat their homes. We are also concerned that those claimants who have previously been summonsed will not manage to pay off their arrears before the end of the financial year, creating the potential for a cycle of debt when they receive their 2014/15 bills.

As such we question the councils assumed collection rate of 80% of the minimum payment, upon which rests the supposed financial neutrality of the scheme. Given that the 80% target was not based on proper modelling and is effectively a guess, as well as the failure to take into account the costs of enforcement to the council, we question the financial viability of the minimum payment in making up the cut government funding.
Indeed any assessment of whether the proposal to maintain the current system for 2014/15 is correct should be undertaken on the basis of the fullest possible information. It is important the council takes into account the experience of the first year using evidence on arrears rates, cost of collection and impacts such as any increase in homelessness. Without providing this information the authority has prevented Brent residents from making an informed decision in their consultation responses. We can only hope that such evidence is provided to councillors in a thorough going impact assessment of the 2013/14 scheme before they make the decision for next year.    

Ultimately although we understand that financial pressure of the 10% funding cut has placed Brent in a difficult situation, we still believe it is possible to find a way not to pass this cut on to your poorest residents. As we have pointed out previously, six London authorities have maintained 100% council tax benefit while a further four have made changes to their scheme but have not implemented a minimum payment. 

We note that not all the boroughs that have chosen to retain 100% benefit are ‘affluent’ as is sometimes claimed by local councillors. Tower Hamlets for example is the 3rd most deprived local authority in the country and has a similar number of CTB claimants to Brent, yet councillors there have chosen not to pass the cut onto their residents and found the money elsewhere.

In light of this we call for Brent to abolish the minimum payment and reinstate 100% council tax support, as well as joining the campaign against this iniquitous policy.

3. To what extent do you agree or disagree about Brent proposing to protect customers on Lower Rate Incapacity Benefit and Higher Rate Incapacity Benefit by classing these customers as being a vulnerable group in its CTS scheme for 2014-15?

While we believe that only the abolition of the minimum payment will create a fair and just Council Tax Support scheme we welcome any expansion of the exemptions to the minimum payment. In this regard, we agree with the authority’s proposal to class Lower Rate Incapacity Benefit and Higher Rate Incapacity Benefit claimant’s as a vulnerable group and thereby exempt them from the minimum payment from 2014-15 onwards.

However we note that in response to our highlighting the issue of Incapacity Benefit in regards to a client of ours the council agreed to apply the exemption to their 2013/14 account and waive their summons costs. We believe it would be unfair to not apply the same decision to other Brent taxpayers in the same situation as our client, whether they have been hitherto meeting the payments or struggled to do so and received a court summons and incurred additional costs. 

4. With reference to Principle 2 set out above, please give details of any other groups that you believe should be protected apart from those already proposed and give reasons why.

It is our belief that any individual or family that is forced to rely on state benefits is by definition vulnerable, particularly in a financial sense, and should therefore be exempt from paying council tax. That is why we argue for the abolition of the minimum payment. However if the council continues to refuse to do so, there are a number of particular vulnerable groups that could and should be protected.  

First among these are Employment and Support Allowance (ESA) claimants. We note that Brent has previously stated that it is not necessary to exempt ESA claimants as disabled people are already covered under the DLA and disability premium exemptions.  However, this fails to take account of the fact that not all ESA claimants also claim DLA. 

Indeed the council has already recognised the need to exempt those in receipt of Incapacity Benefit meaning it would be inconsistent not to extend this exemption to ESA claimants. This is because Incapacity Benefit is in the process of being abolished and replaced by ESA. There are no new claims for Incapacity Benefit allowed and claimants are gradually being migrated to ESA. This means that if an Incapacity Benefit claimant is migrated to ESA and doesn’t also receive DLA or a disability premium they will then lose their exemption to the minimum payment, although their circumstances will have otherwise remained unchanged. Such a situation is surely inconsistent with the principle of exempting those on Incapacity Benefit and should be remedied immediately.

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