Low-income families will have to pay more community taxes if the government does not offer discounts to help during the pandemic recovery period, councils warn.
The Local Government Association (LGA), a membership body of councils in England and Wales, said if renewal is not made, its members will have to stop community tax assistance to some of the most needy.
With increasing budget pressures pushing local services to the limit, councils will “have little choice” but to reduce support, the LGA said.
The organizations warned that higher community tax bills could come with the end of the universal loan hike, other Covid-related assistance, and soaring bills to raise the cost of living for the most vulnerable.
The government launched a spending review last week to set budgets from 2022 to 2025, which led to the LGA’s call.
Shaun Davies, chairman of the LGA’s Resources Board, said, “Record numbers are calling for a discount on their council tax due to the pandemic, and one-time government funding has been critical to helping communities provide vital assistance this year.
“No council wants to ask the least of them to pay more. With funding and demand pressures continuing to push local services to their limits, many councils will have no choice but to reduce discounts without extending these government grants beyond this year.
“The spending review must provide councils with the full amount needed to provide community tax support to those who need it over the next several years, in order to avoid bills being imposed on those who are least concerned can afford. “
Recent figures show that more than 2.5 million people of working age across England applied for a discount on their council tax between April and June this year – the highest number since records began in 2015.
The government allocated £ 670 million to councils over the same period to give discounts to households struggling to pay their tax bills due to the pandemic.
Since 2013, the councils in England have been running their own local programs to help economically weak households with tax exemption following the abolition of the state benefit.
However, the funding the government made available to councils to fund these programs was cut by roughly half – £ 2 billion – between 2013 and 2020.
According to the LGA, this left the councils with the “uncomfortable choice” of levying a council tax on the poor of working age – who in many cases had not yet paid council tax – or diverting funding for services under pressure such as adults Child welfare, homelessness and road maintenance to pay discounts.
The LGA also said the spending review must provide a long-term solution to poverty and disadvantage that allows councils to move away from crisis support and could be an opportunity to allocate at least £ 250 million each year to broader local welfare programs.
A UK Treasury Department spokesman said: “We have allocated more than £ 12 billion direct to councils since the pandemic began.
“The spending of the core departments in this Parliament will increase in real terms by an average of almost 4% per year – a cash increase of 140 billion.
“In the spending review, we will set budgets for the coming years and continue to address key public priorities.”
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