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Council Tax Benefit reform

Key points

  • In April 2013 an estimated 475,000 families saw a reduction in their council tax benefit entitlement.
  • 22 London boroughs require workless families to pay at least some council tax.
  • The increase in council tax payable as a result of cuts to Council Tax Benefit ranges from £0 to £275 (Harrow) per annum.

What does this map show?

This graph looks at the impact of the replacement of Council Tax Benefit (the benefit which gives low income families a discount on the amount of council tax they have to pay) with Council Tax Support (CTS) in April 2013. Under CTS local councils have the power to decide who should be entitled to the benefit and how much they should get, but their budget to do so was cut by 10%. The only condition was that the entitlement of pensioners could not be changed.

At the end of 2012 822,000 families claimed CTB in London. In April 2013 an estimated 475,000 families saw their entitlement cut. In effect these families have to pay more council tax than they did previously.

Before April 2013 all job-seekers across London were exempt from paying any council tax. The map below shows the average amount of council tax a job-seeker now pays per week in each London borough. It shows that 22 London boroughs require workless families to pay at least some council tax and the amount paid varies between neighbouring boroughs. For example in Brent a jobseeker will have an income of £67.10 per week after paying council tax, while across the road in Westminster a jobseeker with an income of £71.70 is be deemed too poor to pay any council tax. Job-seekers in Harrow have to pay on average £5.30 per week (£275 per year) in council tax, the highest level in London and more than double the level in neighbouring Barnet.

It is worth noting that in the next financial year (2014/15) councils in London are expected to see their spending power fall by a further 5%. The boroughs facing the highest cuts, led by Westminster and Newham both at 7%, tend to be in Inner London. One option for councils to increase their income would be to cut council tax benefit levels further.

Data used

Analysis of primary data collected by NPI, 2013.

NOTE: The data on this page may not be the most recent available because this indicator was not updated in our most recent report, published in October 2015. Nevertheless, we have chosen to keep the page live because it tells an important story about poverty in London, and the general pattern described here is unlikely to have changed significantly.

Indicator last updated: 2 December 2015