The LGA is calling for the Chancellor to use this month’s Spending Review to continue grant funding for council tax support schemes over the next three years.
The Government has provided £670 million to councils in this financial year (2021/22) to help them provide discounts to households struggling to pay their council tax bills because of the pandemic.
More than 2.5 million working-age people across England are claiming a discount on council tax – this is the highest number since records began.
The LGA warns that councils – faced with severe funding shortages and extra cost pressures in the years ahead – will be unable to provide council tax support to all those in need without an extension to that funding.
This could mean rising numbers of families on low incomes having to pay more council tax from April. Combined with the end of the Universal Credit uplift and other covid-related support, plus rising bills, this could add to cost-of-living concerns for some of the most vulnerable.
Cllr Shaun Davies, Chair of the LGA’s Resources Board, said: “Councils know how tough things are for many low-income working households who are already concerned about potential income losses and the cost of living.
“No council wants to ask those on the lowest incomes to pay more. Faced with severe funding and demand pressures that continue to stretch local services to the limit, many councils will have little choice but to reduce discounts without an extension to this government grant beyond this year.
“The Spending Review needs to provide councils with the full amount of funding required to provide council tax support to those who need it over the next few years, to avoid bills being forced up for those who can least afford to pay.”
The LGA also wants the Spending Review to provide an effective long-term solution to preventing poverty and disadvantage by improving life chances and building resilience.
It is calling for the full restoration of core, separately identified funding of at least £250 million each year for wider local welfare provision, to ensure that all communities are fairly and effectively supported throughout the pandemic recovery and beyond.
