Tagged: False Economy

Huge Surge In Poorest Families Summoned To Court Over Unpaid Council Tax

There has been a huge surge in the number of low-income families summoned to court over unpaid council tax, new research shows.

New research published by False Economy shows an increase of more than 500,000 court summons in England, as the poorest households are hit by a £490 million cut in council tax support.

And the problem is set to get even worse, as one in seven local authorities plan further cuts in the support available to families struggling to pay council tax bills.

The TUC believes this will result in the poorest families facing even higher council tax demands and lead to a rise in the number summoned to court.

Figures show that more than 3 million people in England were taken to court by local authorities in 2013/14 over unpaid council tax. This represents a 25% rise on the previous year.

Council Tax Benefit was scrapped by the government and replaced by the Council Tax Support Scheme (CTS) in 2013/14. The change meant that councils in England were allowed to develop their own support schemes, but were also forced to accept a 10% in funding from central government for those schemes.

Only a small number of councils chose to keep full council tax support for low-income families. Vulnerable pensioners were unaffected by the changes and are still entitled to have their council tax bills fully paid.

According to figures from the Institute for Fiscal Studies (IFS), around 2.5 million low-income families were affected by a reduction in council tax support in the first year of the scheme.

Where councils introduced minimum council tax payments for the poorest households, court summons increased by 30%. Only 9% of local authorities continue to offer full council tax relief.

The research by False Economy also found that households who qualified for CTS, and who were subject to minimum council tax payment requirements, accounted for 58% of the rise in court summonses.

According to the research, people who are struggling to pay council tax bills are routinely being affected by deductions in benefits and targeted by bailiffs.

A False Economy spokesperson said:

“Council tax support cuts have caused chaos for families and households, and also for councils.

“They are leaving people out of pocket and in debt, which is also bad for local businesses that depend on them as customers.

“Councils are now pursuing people through the courts for money they do not have. It is a shambles made by a cabinet of millionaires in a government that has been completely out of touch with reality.”

TUC General Secretary Frances O’Grady said:

Slashing council tax support has been one of the government’s cruellest cuts.

“It was foolish for ministers to think that families who can’t afford to heat their homes can pay new tax bills for hundreds of pounds.

“And it is heartless for them to stand by as the poorest families are hauled through the courts and harassed by bailiffs.

“If anyone is to be hit with higher taxes it should be the fat cats in the boardrooms and those corporations that are dodging paying their fair share, not the poorest working-age households in the UK.”

Source – Welfare Weekly, 08 Apr 2015

http://www.welfareweekly.com/huge-surge-in-poorest-families-summoned-to-court-over-unpaid-council-tax/

Up To 40% Of Council Tax Levied On Low-Income Households Unpaid

This article was written by Randeep Ramesh, social affairs editor, for The Guardian on Wednesday 27th August 2014

Local authorities were unable to collect up to 40% of council tax due from low-income households that had the charge imposed on them for the first time last year.

Council tax – set on average at £5 a week – has been levied on the poorest households in England since April last year as part of a cut in benefits. But such is the squeeze on household budgets, say campaigners, that the poor cannot afford to pay even these small sums.

The result has been widespread non-payment. Nationally, more than a fifth of council tax charged to working-age claimants was unpaid at the end of 2013-14.

The figures, obtained from responses from 140 councils to Freedom of Information requests by the anti-cuts group False Economy, reveal that some of the biggest towns and cities were left chasing millions of pounds from the poor.

Liverpool collected 61% of council tax due from the poor, leaving the city short by £3.5m.

In Birmingham, the non-payment rate among the vulnerable was 30%, leaving the council seeking to recover £3m in lost revenue.

Leeds, Nottingham and Sheffield were all chasing more than £2m each in tax from those on the lowest incomes.

A report published last month by Child Poverty Action Group and the Zacchaeus 2000 Trust said almost 40% of Londoners affected by the cuts had been sent a court summons for council tax debts in 2013-14, with more than 15,000 claimants’ debts referred to bailiffs.

In Haringey, north London, which collected 80% of the council tax due from benefit claimants, hundreds of households have been taken to court to recover unpaid tax – with non-payers threatened with bankruptcy, repossession and ultimately prison.

Last week, sitting in the magistrates court in Tottenham, Dick, 49, said there was “no way” he could afford the £7-a-week council tax his housing association two-bedroom flat was being charged. He has walked with a stick since his Achilles tendon snapped in 2012.

I don’t work. I get employment support allowance which is £70 a week and my son lives with me and he gets a few hours on a market stall. After rent and everything else we have about £140 a month to live on. Food, clothes, the lot. I go down the food bank to eat. Can’t afford to heat up food because we cannot put money into the gas meter. How can I afford the council tax too? We never paid this before. It’s just getting the poor to pay up. That’s all it is.”

Dick said he had offered to pay £3 a week towards council tax after working out his finances with the local Citizens Advice bureau, but the local authority did not respond to his offer. Instead the council has asked for the full year’s council tax to be paid immediately – £350 – plus the cost of recovering his unpaid tax through a liability order of £125. “It’s ridiculous. I worked all my life. Never needed anything. Now I got nothing they want to get that.”

A spokesperson for False Economy called for the cuts to be reversed. “These figures show that people on low incomes are struggling to cope with council tax benefit cuts, just as the government was warned they would. Households are left either falling into debt and at risk of legal action, or taking money for food and essentials to plug the shortfall, in what is a government-created personal debt crisis.”

Councils said they were caught in an “impossible situation” as ministers had forced local authorities to pass on £500m in cuts when the scheme was introduced – and there would be further reductions in the discounts the poor received as town hall budgets were squeezed in the coming years.

Sharon Taylor, chair of the Local Government Association’s finance panel, said: “Councils would need to find £1bn by 2016 to protect discounts for those on low incomes.

“At a time when local government is already tackling £20bn worth of cuts, this is a stretch too far. Many councils have been put in an impossible position. No one wants to ask those on the lowest incomes to pay more. But pressure on funding for local services means many councils have had little choice but to reduce the discount.”

Hilary Benn, the shadow cabinet member responsible for local government, said two million of the poorest people were affected by the council tax hikes.

“These figures show that many of the people affected, including single parents and disabled people, are finding it very difficult to pay the Tories’ tax increase. The government was warned that this was going to be Poll Tax mark two, and so it is proving.”

The government defended its changes, saying it had “worked with councils to freeze council tax for the last four years” for most residents.

Kris Hopkins, the local government minister, said: “Our reforms to localise council tax support now give councils stronger incentives to support local firms, cut fraud, promote local enterprise and get people into work. We are ending Labour’s something-for-nothing culture and making work pay.”

Source –  Welfare News Service, 29 Aug 2014

http://welfarenewsservice.com/40-council-tax-levied-low-income-households-unpaid/

Households hit by ‘bedroom tax’ on the rise in Northumberland

New research shows that the number of households in the North East affected by the bedroom tax has fallen by just 12 per cent during the last year, with seven out of eight affected households unable to avoid a cut in rent support.

 The research, sourced under the Freedom of Information Act by TUC-backed campaign site False Economy, reveals that the number of households subject to the bedroom tax has actually risen by 5.8% across Northumberland – and barely fallen in most other parts of the region.

The research suggests that the vast majority of tenants hit have been unable to respond to the cut in their housing budget by moving to a smaller home, earning their way out of housing benefit or taking in a lodger as the government expected.

As rent arrears grow and the widely predicted shortage of vacant one-bedroom properties becomes more apparent, thousands of low-income households have had no choice but to try to absorb a significant cut in their income. Ministers will claim that the figures could improve over four or five years – but by then many tenants will have been buried under a mountain of unpayable debts, says False Economy.

The figures  show the change in councils’ bedroom tax caseload –comparing the number of households who were subject to a reduction in their housing benefit when the tax was introduced last April to the numbers affected in February and March 2014. Some local authorities report an increase in their bedroom tax caseload, while most show only modest reductions.

If the bedroom tax had achieved its stated objective of significantly cutting both the under-occupation and the overcrowding of social housing, the caseload reduction would be significantly greater, says False Economy.

The research’s key findings include: Middlesborough Council is the only local authority in the North East whose bedroom tax caseload has fallen by more than a quarter. It has fallen by less than 10 per cent in Darlington and Sunderland, and actually risen in Northumberland.

Across Britain the number of households affected by the bedroom tax has fallen by 15 per cent.

A False Economy spokesperson said: “The bedroom tax has failed on each of the government’s stated objectives – just as so many warned it would.

“But the bedroom tax was never about make making housing allocation fairer or cutting the welfare bill. It was about putting social housing further out of the reach of those who need it, and driving families into a debt spiral that traps them in squalid overpriced private tenancies and jobs that don’t pay.”

Northern TUC Regional Secretary Beth Farhat said: “The bedroom tax is one of the most spiteful and unfair measures introduced by this government. It shows just how out of touch with ordinary people and the real world ministers are.

“Ministers seem not to know about the nationwide shortage of single bedroom social homes nor are they aware of any of the many valid reasons why tenants need more space than the government says they do.

“And the bedroom tax hasn’t stopped the housing benefit bill from going up. This is because wages have stagnated for the working poor and rents have increased as the decades long failure to build enough homes bites.”

Source –  Berwick Advertiser,  05 April 2014

Councils Using Controversial Lie Detector Tests To Catch Benefit Fraudsters

This article  was written by Randeep Ramesh, Social affairs editor, for theguardian.com on Monday 10th March 2014

More than 20 councils have used or plan to use controversial lie detector tests to catch fraudulent benefits claimants, despite the government dropping the technology because it was found to be not sufficiently reliable.

Responding to freedom of information (FOI) requests, 24 local authorities confirmed they had employed or were considering the use of “voice risk analysis” (VRA) software, which its makers say can pick out fraudulent claimants by listening in on calls and identifying signs of stress.

> Of course, people in genuine need never show signs of stress !

Although in 2010 the Department for Work and Pensions (DWP) announced it had given up VRA software, the FOI responses show councils have been spending, in some cases, millions of pounds on the technology.

Local authorities have continued to use the system to check whether people are honestly claiming the single person council tax discount, which allows single adults to pay 75% of the amount levied on a family.

Tory-controlled Derbyshire Dales said it had taken part in a county-wide review of council tax in 2011 that had used the technology – a contract worth £280,000 to Capita.

> Crapita – who’d have guessed they’d be involved in something like this ?

The same company was hired by Labour-run Southwark in south London and was paid £2.5m over three years. The council says VRA technology “was used as one tool to assist in determining the customers’ eligibility for the discount”.

The council said it did not record how effective the scheme had been but did say that its real worth was in making the public aware that it would crack down on benefit cheats. A council minute last year records: “Although [VRA was] used in a minority of cases, a significant amount of publicity was received that assisted in communicating to residents the council’s intention to remove discounts if property occupancy could not be evidenced.”

VRA is supposed to detect signs of stress in a caller’s voice by analysing short snippets of speech, and is still used in the insurance industry to catch fraudsters. Critics say the system is not powerful enough to distinguish cheats from honest callers.

A number of councils – Redcar, Middlesbrough, West Dorset and Wycombe – said they were convinced of VRA’s merits and were considering use of the system in the future.

False Economy, the trade union-funded campaign group that put in the freedom of information requests to more than 200 local authorities, told the Guardian: “It says a lot about council outsourcing – and the benefits-bashing agenda – that this pseudo-scientific gimmick is now making its way in through the back door. Capita is a firm with a long rap sheet of expensive failure. Neither they nor their technological snake oil should be trusted.”

There have been complaints from claimants who were assessed using the technique. In South Oxfordshire two people formally protested after having their voices tested in 2013. The council says that Capita’s system helped reduce the number of people claiming the single person discount by 3%, and would consider using it again.

Voice risk analysis has been mired in controversy since scientists raised doubts over the technology soon after it reached the market. In 2007, two Swedish researchers, Anders Eriksson and Francisco Lacerda, published their own analysis of VRA in the International Journal of Speech, Language and Law. They found no scientific evidence to support claims for the device made by the manufacturer.

Lacerda, head of linguistics at Stockholm University, told the Guardian that VRA “does nothing. That is the short answer. There’s no scientific basis for this method. From the output it generates this analysis is closer to astrology than science. There was very good work done by the DWP in the UK showing it did not work, so I am surprised.”

However, the Local Government Association, which represents English and Welsh councils, said the tool was used to help identify possible fraud. Peter Fleming, chair of the LGA’s improvement board, said: “Councils detect almost £200m-worth of benefit fraud committed every year. Every pound fraudulently claimed by people trying to cheat the system is a pound less that councils have to help those who need it most.

“No one is going to be prosecuted for benefit fraud on the result of voice analysis tests alone. But, in a small number of areas, councils use this technology as part of a wider range of methods to identify cases which may need closer scrutiny.”

The DWP told the Guardian: “Local authorities are free to design their own approaches to preventing benefit fraud.”

In a statement Capita said that, when it “undertakes a council tax single person discount review, councils can choose to use voice risk analysis technology as part of the process. The technology is never used in isolation. It is only used in cases which are deemed ‘high risk’, when earlier stages of the review have indicated that more than one person may be living at the property.”

Capita added: “The selective use of VRA technology is a useful additional tool in the validation process of identifying potentially fraudulent claims for single person discount.

“The decision of whether to revoke benefits is made by councils, based on the range of information gathered during the review process. The removal of claimants receiving discounts that they are not entitled to reduces council spend, enabling money to be directed to those who really need the council’s support.”

> Tell you what – a compromise. You can use it on claimants after it has undergone an extensive test – 5 years, say – on all MPs, local councillors, Jobcentre staff, etc

Source – Welfare News Service,  10 Mar 2014

http://welfarenewsservice.com/councils-using-controversial-lie-detector-tests-catch-benefit-fraudsters/