Hard-up households warned they may lose tax bill support

HARD-up households in Bristol face deep cuts in the support they get for their council tax bill.

The Government yesterday announced a last-minute £100 million grant to local authorities amid growing fears about the impact of the cuts to council tax benefit.

Across Bristol and the surrounding areas, around 55,000 families are in the firing line from the changes, which come into force in April 2013.

It means Bristol's new mayor will have to choose between further cuts to services or scaling back support given to households to pay bills.

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Council tax benefit is worth up to 100 per cent of a household's bill. Ministers are set to hand the management of the scheme to councils – and are ordering them to cut costs. In Bristol alone, the cost of council tax benefit reached £77 million last year.

Bristol council leader Simon Cook said around £5 million would have to be found to meet the shortfall in the city.

He said: "The Government is trying to simplify the benefits system, which is right. But the process by which we are doing that has meant a greater burden on local authorities to find, at the same time as they are cutting our grants."

Officers have already drawn up a list of options, including scrapping second-home discounts to reduce the burden.

Bristol East MP Kerry McCarthy said: "It's a really tough decision for the new mayor to make – do you take categories of people out of the benefit, or do you cut it across the board?"

The total funding reduction across the former Avon area comes to around £8 million. The Government has said pensioners must not see their bills increase – thus increasing the pressure on low-earners. Campaigners warned this week that up to half of poor residents would refuse to pay council tax if they are faced with bills for the first time. This would mean councils would have to decide whether to bother pursuing amounts as small as £5 per month.

Thornbury and Yate MP Steve Webb, a minister in the Department for Work and Pensions, said: "I would certainly recognise that the timing is tight, and the pressure on council budgets. That is why anything the Government can do to help is welcome."

Councils will bid for a share of the £100 million announced yesterday by Local Government Minister Brandon Lewis. But it will be only offered to those that agree to limit the sums paid by the poorest households.

Mr Lewis said: "As councils draw up their local schemes, it is clear that many are delivering savings using their local flexibilities and discretion, without unfairly increasing the burden on those who are currently on benefits. Equally, there are some councils which are asking for very large additional contributions from those on benefits. The new £100 million transition grant will seek to encourage best practice."