New statistics on council tax collection in England have been very revealing. Photo: Getty
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Is council tax going the same way as the poll tax did?

While councils are collecting more council tax than a year ago, arrears are mounting; are we seeing the beginnings of a trend that mirrors that of the poll tax?

In recent days, the Department for Communities and Local Government (DCLG) has released new statistics on council tax collection in England. Covering the period April 2013 to March 2014, it is the first official data which allows us to assess the impacts of the localisation of Council Tax Support (CTS). A headline finding was that while more than £1bn extra was collected, in-year arrears increased by £145m – up more than 20 per cent on the previous year. Using data collected by NPI for the Joseph Rowntree Foundation we have linked these outcomes to the CTS scheme introduced by each council. The findings do not bode well for the future of localised CTS.

From April 2013, local councils across England were given the power to devise their own systems of CTS for working-age adults. It replaced the national system of Council Tax Benefit (CTB) which ensured that the poorest households did not have to pay council tax. The change marked a historic move from a nationally devised system to one of 326 different local schemes in England. Alongside this restructuring, the money provided by central government to fund CTS was cut by 10%. Each council became responsible for devising its own scheme within the reduced budget. The majority of councils chose to pass the cut on to CTS recipients, with the introduction of a ‘minimum payment’, which requires everyone to pay at least some council tax regardless of income, being the most common approach to making up the funding shortfall.

The graph below classifies councils according to the size of the minimum payment each chose to impose, from zero at one end to above 20 per cent at the other. 8.5 per cent is included because it was the maximum a council could set last year and still be eligible for central government’s transitional grant. Each of these groups is then split according to the size of the increase in arrears (between 10 per cent and 25 per cent, 25 per cent to 50 per cent, 50 per cent to 100 per cent).

To see what the graph is showing take, for example, the 97 councils who had no minimum payment. 38 per cent of them saw arrears rise by between a tenth and a quarter, 10 per cent saw a rise of between a quarter and a half while 5 per cent saw a bigger rise still. The other 48 per cent saw either a small rise or a fall. By contrast, among the 43 councils with the largest minimum payments, more than four fifths saw arrears rise by at least a quarter.

(Click on graph to enlarge).

The pattern here is very clear. Councils who chose not to introduce a minimum payment saw a smaller increase in arrears than those who opted for a minimum payment. The larger the minimum payment, the worse the picture becomes. This worsening is seen in both the proportion suffering a rise in arrears (the overall height of each bar) and the average size of the rise (how dark each bar is).

In April 2014, many of the local schemes changed again: 56 councils increased the minimum payment from the year before and a further 15 included one in their scheme design for the first time. In terms of the graph, councils in England are moving to the right. These changes have seen the number of families having to pay council tax for the first time increase by 110,000 to 2.34m. The additional council tax paid compared to the former national system is also higher in the second year at £149, £10 more than in 2013/14.

While councils are collecting more council tax than a year ago, arrears are mounting. The further cuts to CTS made in April 2014, which are not reflected in this year’s data, are likely to see these figures worsen next year. Are we seeing the beginnings of a trend that mirrors that of the poll tax which resulted in growing arrears - and ultimately led to its abolition?
 

Sabrina Bushe is research and communications officer at the New Policy Institute

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Theresa May missed an easy opportunity on EU citizens' rights

If the UK had made a big, open and generous offer, the diplomatic picture would be very different.

It's been seven hours and 365 days...and nothing compares to EU, at least as far as negotiations go.

First David Davis abandoned "the row of the summer" by agreeing to the EU's preferred negotiating timetable. Has Theresa May done the same in guaranteeing the rights of EU citizens living here indefinitely?

Well, sort of. Although the PM has said that there have to be reciprocal arrangements for British citizens abroad, the difficulty is that because we don't have ID cards and most of our public services are paid for not out of an insurance system but out of general taxation, the issues around guaranteeing access to health, education, social security and residence are easier.

Our ability to enforce a "cut-off date" for new migrants from the European Union is also illusory, unless the government thinks it has the support in parliament and the logistical ability to roll out an ID card system by March 2019. (It doesn't.)

If you want to understand how badly the PM has managed Britain's Brexit negotiations, then the rights of the three million EU nationals living in Britain is the best place to start. The overwhelming support in the country at large for guaranteeing the rights of EU citizens, coupled with the deep unease among Conservative MPs about not doing so, meant that it was never a plausible bargaining chip. (That's before you remember that the bulk of the British diaspora in Europe lives in countries with small numbers of EU citizens living in the UK. You can't secure a good deal from Spain by upsetting the Polish government.) It just made three million people, their friends and their families nervous for a year and irritated our European partners, that's all.

If the United Kingdom had made a big, open and generous offer on citizens' rights a year ago, as Vote Leave recommended in the referendum, the diplomatic picture would be very different. (It would be better still if, again, as Vote Leave argued, we hadn't triggered Article 50, an exit mechanism designed to punish an emergent dictatorship that puts all the leverage on the EU27's side.)

As it happens, May's unforced errors in negotiations, the worsening economic picture and the tricky balancing act in the House of Commons means that Remainers can hope both for a softer exit and that they might yet convince voters that nothing compares to EU after all. (That a YouGov poll shows the number of people willing to accept EU rules in order to keep the economy going stretching to 58 per cent will only further embolden the soft Brexiteers.)

For Brexiteers, that means that if Brexit doesn't go well, they have a readymade scapegoat in the government. It means Remainers can credibly hope for a soft Brexit – or no Brexit at all. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.

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