Some of Birmingham’s poorest families are now facing an extra £300 a year council tax bill following Government benefit cuts, it has been confirmed.
Out of work and low income households will be hardest hit under plans set to go before Birmingham City Council’s Cabinet on Monday September 3.
The tax rise comes after the Government ordered the city council to reduce its council tax benefit bill by ten per cent – or £10.9 million – next year, meaning that some of Birmingham’s most vulnerable people would have to pay more.
The Government has already told the council that it could not increase the tax charge to pensioners and the Labour run council has opted to extend that protection to households with disabled people and those with children under six years old.
The council will also introduce a charge for the owners of empty homes with the aim of raising an extra £4.4 million to offset the impact on low income homes.
Council leader Sir Albert Bore said: “Government is imposing this change, which will hit Birmingham citizens, and all to replace a council tax benefit system that is already working well.
“The city council cannot afford to make good this cut in government funding without increasing the already severe savings it is making in all other service areas.
This means that we face the hard choice of how we pass on this funding shortfall and we will be consulting with residents on this over the next three months.
“There are 135,000 Birmingham households which already receive council tax benefit because they are living on low incomes and need this help to meet their council tax bills. Many of those families are working but are still on low incomes, trying to make ends meet.
“The Government has simply passed the buck, knowing full well that councils cannot afford to absorb the shortfall and that we have no option but to pass the impact on to hard working families in our cities.”
The council has rejected a plan to spread the cost across all council taxpayers and instead will offer only a 76 per cent discount to many of the 135,000 people currently receiving council tax benefit.
It means households with part-time or low income workers having to find an extra £250 to £350 per year depending on their council tax band and the tax rate set next April.
A hardship fund of £1 million will be set aside to help households with special circumstances or greatest need.
The council will consult citizens, voluntary groups and other agencies over the plans for the next three months before the proposal is formally adopted.