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Thousands in Exeter facing council tax shock

By Exeter Express and Echo  |  Posted: January 17, 2013

Worrying outlook: Many families in Exeter are facing a rise in their household costs due to council tax benefit changes

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ALMOST 6,000 of Exeter's poorest households are facing a bills bombshell when council tax benefit is scrapped.

The city council has revealed those affected will have to pay an average of £277 a year – or £5.32 a week.

And thousands of people previously exempt from paying the tax will receive bills for the first time in April.

The authority claims it has no choice but to make families on low incomes pay more after the Government left a funding shortfall of more than £1m for a new council tax support scheme.

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Exeter Citizens Advice Bureau is bracing itself for a surge in calls for help amid warnings that hard-pressed families will have less money to spend on their children's needs.

The council has confirmed that more than 4,000 homes will have to pay council tax for the first time, including lone parents and families where someone has a disability.

All working age claimants of council tax benefit will have to pay more – on average an extra £277 a year, or £5.32 a week, from April. Pensioners are protected from losing any of their council tax benefit.

Steve Barriball, director of Exeter CAB, said many of those affected are not yet aware of the changes.

"We haven't had a huge number of people yet who are aware of what the impact will be on them, and that's a real worry," he said. "People will get caught out and be surprised when they get a council tax bill which means they have to pay something for the first time.

"Outgoings are already outstripping income for many people, so it's going to be even more challenging for households to be able to balance their budgets."

The increased burden on some of the most hard-up families is a result of the Government's decision to abolish council tax benefit.

In its place, local authorities have been tasked with devising their own council tax support schemes – but with 10 per cent less funding.

The shortfall in Exeter totals more than £1m a year, and the pain will be shared across all working age households who get help with their council tax. They will lose around a quarter of their current support.

Those in Exeter set to be affected include:

2,816 households with one or more children.

1,739 households where the claimant, partner or a dependant child is disabled or a carer, including 158 with a disabled child.

1,866 lone parents, including 649 with a child under five.

748 unemployed people claiming Jobseeker's Allowance.

The council's own impact assessment of the new scheme states: "5,709 working age claim households will be asked to pay more towards their council tax.

"More than 3,000 of these households do not currently pay anything and may be asked to make payments of council tax for the first time."

It goes on to warn: "All families will see a reduction in the help they receive with their council tax and some will be expected to pay for the first time. This will leave less of the family's income available to be spent on the children's needs."

It comes as other benefits are being cut in real terms.

The report adds: "Tenants in both the private and social sectors may also see reductions in the amount of housing benefit available to them as a result of other welfare reforms.

"These households could therefore face multiple pressures on their budgets."

Under Exeter City Council's new scheme, the highest level of support will be 80 per cent, meaning all working age households will have to pay at least 20 per cent of their council tax bill.

An exceptional hardship fund will be set up to help the most vulnerable residents. Exeter's Labour MP Ben Bradshaw said: "Many people in Exeter are in for a big shock in April when they find themselves having to pay for the Government's economic failure.

"The Government's cut in council tax relief will hit people in work on low incomes to the tune of £250 a year at the same time as millionaires are getting a tax cut.

"Exeter City Council is doing what it can to reduce the impact of the change while maintaining services, but like all local authorities, it has been put in an impossible position by the Government."

Councillor Ian Martin, lead councillor for business transformation and human resources, said: "People need to be clear that these changes have been forced upon the council because of a large reduction in government grant.

"We always knew that we would have to make some difficult decisions about who gets financial support and how much they get and that is why we recently consulted the public on the impact of these changes. Consultation was thorough and resulted in some 1,400 responses from the public."

Related:Will the abolition of council tax benefit affect you?Support available for those hard hitStart planning now to pay the extra costs

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  • waynejkc69  |  January 24 2013, 1:46PM

    I think many people on benefits needs to assess whether smoking and drinking is a ' need '. I only hope that those affected can present, without fraud, income and expenditure sheets and issue them as evidence to the Magistrates Court when a ' Liability Order ' is served. If people thin they are going to be worse-off and they have done all they can they need to stick up for their rights. However, saying they need the money for fags and booze is going to be tough. I am not ' stereo-typing ' those on low income here, but I am saying that poverty should be absolute and not derived from spending money on non-essentials.

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  • smallboy2010  |  January 23 2013, 2:17PM

    I can see a few sky subscriptions being cancelled this year !

  • catherine_d  |  January 23 2013, 2:10PM

    The ever-disingenuous Adrian Fullam, who accuses Labour of playing politics, but spends time at Council meetings asking questions for the sole purpose of putting those answering in a bad light by printing a distorted or truncated version of their answer online or in his party's leaflets. To put right his assertions: 1) This is a cut direct from central government who have always paid for council tax benefit. His party as part of the Coalition have reduced this payment by 10% this year and are planning to make further future reductions. ECC have had to make their own swathing cuts this year, and certainly should not be subsidising any cuts made by his government, especially as this would not be a one-off payment as he claims, but an annual, increasing liability. Should ECC also compensate all those who have lost their tax credits, their disability allowance or their child benefit? Even if ECC were to subsidise this cut from their own hard-pressed coffers, the majority of residents' council tax is levied by DCC, who will also be passing on the cut. This is the part of Pete Edwards' answer that he has conveniently not shared. 2) ECC have not had the power to exempt "any group they see fit", as exemptions have also been handed down from central government. As he knows. Finally, his claim that the lowest paid have a spare £600 kicking around this year to help with their council tax payments? Absolutely disgraceful, and I hope that this claim comes round to bite him and his party at election time. I am quite prepared to eat my words if anyone who has been taken out of income tax can contact me to let me know what luxuries they have bought with this windfall. Or has it, as we all know, been swallowed up by in-work benefits and tax credits cuts, pay freezes and high VAT? Leaving nothing but an empty headline on a Lib Dem Focus leaflet blowing around in the gutter, and higher earners, who have also pocketed £600, laughing all the way to the bank? Council officers and the 1400 people who responded to the consultation which was held at such short notice should be congratulated for their extremely swift response to this depressing cut, which has at least ensured that we can have some confidence that it is being handled in the fairest and most effective way possible under the circumstances.

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  • AdrianFullam  |  January 17 2013, 11:23PM

    The Echo is now becoming a bit of a Labour fanzine - why are there no quotes from the Lib Dems or the Tories? So I'll say my bit here as a Lib Dem. First, the Labour Council set the rules for this new Council Tax Benefit scheme. They chose the priorities and had the power to exempt any group they saw fit. However when they have to play their part in deficit reduction, they start crying. In fact, they have an interest in exaggerating the effect and seeing real discomfort - to use as a political tool to attack the government. When I asked the Labour Council Leader Pete Edwards at the last Full Council meeting whether he would divert money from other budgets if there was evidence of real suffering from the welfare changes - he categorically said no. In other words, his swimming pool is more important. The cost of repaving the area outside John Lewis was £1.5million. The cut in this budget is £1million. Second, there is a notion prevalent out there that some people don't pay Council Tax, or rent for that matter. They still receive the services though. What is more accurate is that their Council Tax is paid for them by extra tax on their working neighbours. It is amazing that "thousands of people previously exempt from paying the tax will receive bills for the first time" Unless they have the reason of just turning 18, this shows a dysfunction that so many people have never had or taken the opportunity to subscribe to their society, that pre-dates this government. Thirdly, this will affect the working poor. Labour love to go on about this, but they always conveniently omit the fact that many low-paid workers have been taken out of income tax by the raised threshold - a Lib Dem demand in the Coalition agreement. This means that workers in and out of benefit will have extra income of up to £600 a year to offset these changes. This doesn't mean the pain all goes away, but that those on low incomes who work are less affected or better off. In a meritocratic society, work should be rewarded and should be the norm, with support offered to tide people over between jobs - not as a viable long-term alternative to work. In boom times, poverty is measured relative to the mythical middle income person in Britain. Few anti-poverty campaigners have celebrated the narrowing gap as the income of Middle Britain has been squeezed greater than the hitherto index-linked increased in benefits. Now that they are held to 1% rises, similar or more than many workers are getting, where is the intrinsic unfairness? Those on benefits who find some work, will find their situation eased. Those unable or unwilling to work should be given the means to live humanely, but surely should not enjoy better amenity than those in the same circumstances who make the effort to go out and work. Even at the historical heights of the Labour welfare spending boom, there were constant voices about the wide extent of poverty. I think that there always will be. However, there is room for many people on the lowest incomes to live humanely by making correct decisions and living at all times within their means. For the remaining people in impossible positions, there is discretionary support in the system to help them through.

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  • 147ref  |  January 17 2013, 10:49PM

    time to go by percentage of what you earn i reckon, instead of going by house value, how is it right that 2 neigbours one earning 10k the other 25k pay same council tax

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  • Notrik  |  January 17 2013, 10:36AM

    The undeserving poor come to Exeter! Perhaps the Big Society will help them with food banks. Perhaps the electorate will wake up and realise we do not want a return to the Victorian era but with a Thatcherite spin (workhouses in the community) and so proceed to kick this appallingly incompetent, ideology-led shower out of power at the next election.

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  • LTaylor12  |  January 17 2013, 9:55AM

    Perhaps the 'shock' of having to enter the real world of paying bills will encourage them to get a job and pay their way in society like the rest of us do.....i wont hold my breath though. £5 a week is hardly realistic in comparison to what us workers pay

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