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Aug 28 2014

Guest Post: Harrow’s Council Tax Reduction Scheme

guest_postLast month, the Child Poverty Action Group (CPAG) and Zacchaeus 2000 Trust (Z2K) published a report revealing that Harrow Council is charging unemployed residents the highest rate of Council Tax in London – 30 per cent of the full bill, from benefit of just £72 a week. Even disabled residents are being asked to pay 14 per cent. This dreadful policy led to over 3,700 Harrow residents being served with a court summons for late-payment of their new Council Tax liability last year. Most of those then had spurious “legal costs” added to their bill and hundreds now have bailiffs imposing further costs and threatening to take away their belongings if they don’t come up with the cash.

What we didn’t know then was that Harrow’s ruling group of councillors was just about to propose increasing the amount disabled residents have to pay and also increasing the charges to part-time workers. Their consultation paper claims that Harrow can’t afford its current Council Tax Reduction scheme and needs to reduce expenditure by £2.5 million. It sets out four options, all of which involve significant increases in the charges. For example, disabled claimants could be asked to pay £233 more a year. Maintaining the existing scheme or reducing the charges isn’t even presented as an option.

Shockingly, this consultation skates over the real financial hardship these new charges have caused the borough’s poorest residents as if it doesn’t exist. There is no mention of how these charges compare to other boroughs. And it certainly doesn’t acknowledge that the level of Minimum Payment in Harrow was originally set so high that the budget was underspent by around £800,000. Harrow’s scheme was based on an assumption that the number of claimants would increase by 3.7 per cent in both 2013/14 and 2014/15. In fact, it fell in both years. We expect that underspend to be even higher in 2014/15 as the level of Minimum Payment for unemployed people has increased from 22.5 to 30 per cent.

Z2K recognises that this hardship is driven by the Coalition Government’s “localisation” of Council Tax Benefit and the accompanying 10 per cent cut in funding. We also appreciate that local authorities are facing further cuts to their funding. However, when several other London boroughs, such as Merton, Wandsworth and Tower Hamlets, have been able to find the savings to make up this shortfall, it is deeply worrying that Harrow has not only passed this cut straight on to its poorest residents, but actually raided the funding given to cross-subsidise other council services.

No-one likes to pay tax. But it is a widely-supported principle of our tax system that people pay according to their means. The breach of that principle is what was so contentious about Margaret Thatcher’s “Poll Tax” a generation ago. In its localisation of Council Tax support, the Government has made way for councils to reintroduce their own Poll Tax. And Harrow Council has actually made a bad situation much worse. We hope councillors from across the political spectrum will now take a proper look at why Harrow is charging so much more than other boroughs and using such heavy-handed tactics to get the money.

– Joanna Kennedy (Z2K) and Megan Jarvie (CPAG)

More details on this here.

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1 comment

  1. mike mcfadden

    Ever since Labour took office in Harrow council tax as gone through the roof on waste. Nu-Labour also managed to turn a once nice clean borough into a slum!! Do you feel proud of what Labour voters did.?

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