Hard Times: Campaigners clash with council over council tax support. Photograph: Marco Verch.
A cross-party campaign is calling on Hackney Council to walk back a recent cut to tax relief and instead provide full support to the borough’s poorest residents.
The Town Hall came under heavy fire from anti-poverty charity Zacchaeus 2000 Trust (Z2K) in September last year after it announced plans to increase the amount of council tax paid by working age residents in financial hardship.
In order to offset government cuts, the council made the decisionearlier this year to go ahead with changes to its Council Tax Reduction Scheme (CTRS), increasing the amount paid by working age claimants from 15 to 17 per cent.
The No Poll Tax 2 campaign has now started a petition calling on the local authority to think again and provide 100 per cent support through a “fully funded Council Tax Benefit Scheme”.
Z2K campaigner Jen Durant said: “We strongly campaigned against Hackney Council’s plans to cut council tax support for people on the lowest incomes.
“While we understand the financial pressure local authorities are under, we see no reason why the council is choosing to push the burden of government cuts onto its poorest residents.
“We have long argued for a return to 100 per cent council tax benefit, and we very much hope Hackney will follow the lead of boroughs such as Tower Hamlets and Camden in reinstating full support.”
The cut to council tax support for roughly 27,000 working age claimants was made in response to a predicted £500,000 rise in the cost of the CTRS, and against a backdrop of a fall in financial support from central government.
The council initially planned a 5 per cent cut – meaning those affected would have to pay 20 per cent of their bill – but the idea attracted sharp criticism from local political parties.
The Town Hall then settled on 17 per cent, effectively a 2 per cent cut, after a fraught consultation process during which a Z2K petition labelled the original plan “absurd”.
Modelling undertaken by consultancy firm Policy in Practice (PiP) predicted that the current 17 per cent rate would leave vulnerable households “more impacted than non-vulnerable households”.
Both Hackney’s Liberal Democrats and Greens have signed up to the No Poll Tax 2 campaign, which is pushing for the council to imitate other boroughs such as Tower Hamlets and Camden in offering 100 per cent council tax relief through the scheme.
Vice chair of Hackney Liberal Democrats Darren Martin said: “Nobody disputes that funding cuts to local government have left Hackney Council with difficult choices to make, but they do have choices.
“The neighbouring borough of Tower Hamlets with similar pressures to Hackney provides 100 per cent council tax support for its poorest residents and we believe Hackney Council should do the same.
“The funding pressures are not likely to get any easier in the next few years and the reality is that the cost of the CTRS will continue to rise.
“The answer is not to ask the poorest people to pay – the solution is to find the additional funding to safeguard the scheme and protect those who need it the most.”
Debt adviser and campaigner Ripon Ray added: “Asking people to pay contributions to council tax regardless of income or circumstances is regressive and amounts to a new poll tax.
“Hackney is attracting wealthy residents and many of them can pay more. It appears that there is lack of consideration for those who are unemployed, disabled, single mothers or zero-hours contract workers.”
The campaign is also calling for exemption of bailiff action for those on council tax support “as a matter of principle”.
Hackney Green Party campaigner Samir Jeraj said: “[Bailiff action] causes immense distress to people who are already under a lot of pressure and actually only ends up driving people further into debt.”
Responding directly to the petition, Hackney Mayor Philip Glanville said that offering 100 per cent relief would cost the council somewhere between £2.6 million and £3 million.
Mayor Glanville said: “That £3 million, it would have had to come from somewhere else, it would have led to further cuts in services.
“This isn’t the only service to the most vulnerable in the borough. There’s housing support, there’s our youth services, debt advice within the council, it’s equivalent to what we spend on libraries – I don’t want to be going to look at these services for that £3m.
“I would say to the campaigners, we are absolutely with you that this should be a fully funded scheme. The people responsible are government, and they need to return that funding to the system.
“And until they do, it’s very hard for boroughs to make up that shortfall. Boroughs like Camden have a very different shortfall in terms of number of claimants and levels of council tax, so doing it here is not as easy because we have a lot more people in receipt of council tax benefit than Camden does.
“We did a really big consultation exercise last year. A lot of the same people were involved in that consultation process, and a lot of poverty action charities and organisations both inside and outside the borough made their views known.
“We listened, and stepped back from the proposals to increase the contribution to 20 per cent.
“We settled on 17 per cent because it met some of those deeper concerns about the impact of going to 20 per cent, but it still reflected the challenge of our financial position in making sure that the scheme was sustainable for the long term.”
Mayor Glanville added that the changes to the scheme would be reviewed half way through the term of his administration, and that “halfway through the first year of the scheme operating is not the time to suddenly change.”
Hackney Council has seen a backlash within the Labour Party over plans to increase council tax contributions for some of the borough’s poorest people.
Mayor of Hackney Phil Glanville: 'Council tax changes not an easy decision.' Picture: Gary Manhine/Hackney Council
The council is consulting on whether to change its council tax reduction scheme, which it says has become “too costly to administer” at £25.5 million a year for its 32,000 recipients.
The proposal is to reduce the 85pc reduction for working age residents by 5pc by April. The contribution of a single parent with four children at school living on jobseekers’ allowance and child tax credits, living in a band E property, could rise from £3.50 to £6.43 a week, for example.
And a single person over 35 with employment support allowance of £73 weekly, living in a band B property, could see payments rise from £2.23 a week to £4.09 a week. But pensioners would not be affected.
Some community and political groups are opposed to the plans and Hackney South Labour Party has voted for a motion asking the council to reconsider – and even go as far as scrapping council tax charges for the poorest altogether.Protest: Ripon Ray.
Debt advisor Ripon Ray, who put forward the motion, negotiates repayment plans with Hackney Council. He has seen a big increase in people ending up in council tax arrears since the scheme to charge council tax contributions to those on a low income was introduced in 2013.
His motion suggests covering the cost by “rethinking empty property relief and penalty charges or a small hourly rise in car parking charges” – or as a last resort to implement a “necessary small rise” in other people’s council tax payments.
Penny Wrout, who voted in favour of the motion, said: “The government shunted responsibility for the benefit over to local authorities a couple of years ago, but omitted to allocate sufficient funds to cover it.
“But many Labour members like myself feel that cutting the benefit for the poorest people in the borough isn’t the way forward.”
"Many Labour members like myself feel that cutting the benefit for the poorest people in the borough isn’t the way forward."
The Hackney Green Party also has concerns. Samir Jeraj said: “Some of the poorest people will see their council tax go up by 80pc. Before they respond to the consultation, residents deserve to know what the impact will be on child poverty, on the increased use of bailiffs against people who cannot pay, and on the increase in doorstep lenders.”
Hackney mayor Phil Glanville said it hadn’t been an “easy decision”, and that many other options had been considered – but it had been decided the proposal was the “fairest option”.
“When the government handed responsibility for administering council tax-related benefits to local government, it did so with a massive funding shortfall, on top of a huge reduction in overall funding for councils,” he said.
“We will continue to provide extra support for the most vulnerable people. In addition, local care leavers will now be exempt from paying council tax and those fleeing domestic abuse will not have to pay it for a second property.”