The Council Tax cliff edge

By Elgan Hearn, Local Democracy Reporter 

Concerns have been raised that more people will not be able to afford to pay their future council tax bills, even though the increase was lowered from 3.9% to 2.9% last week.

The Independent/Conservative budget was narrowly voted through at Powys County Council, but during the debate several councillors felt that the increase could tip many in Powys over the financial cliff edge.

In his speech, Plaid Cymru group leader Cllr Elwyn Vaughan included data from the Joseph Rowntree Foundation  report “Poverty in Wales”, which outlined how tough times are for people.

Cllr Vaughan, said: “Powys has already seen an increase in eligible claims for Council Tax Reduction Scheme. The current caseload increase is 827 claims, which is a 9% increase when comparing to this time last year.

“Office for National Statistics data shows 3,240 people were claiming out-of-work benefits as of mid-January in Powys, much higher than the 1,440 recorded in early March 2020.

“The reality is that the Mid Wales annual salary is £9,000 a year less than the UK average.”

Powys County Council’s (PCC) anti-poverty champion, Cllr Joy Jones, said: “The Council Tax reduction scheme helps many residents, and I’m grateful we have this.

“But it doesn’t help our hard working residents, there are some that are just over the cut off line of getting that help.

“They are the people that are now finding themselves in poverty, people were struggling before, but the pandemic has caused a crisis.”

She pointed out that rents would be increased, the price of fuel, household bills and food are all rising.

Cllr Jones added: “I appreciate the council has reduced the proposal but it’s still too high for many people.

“As we come out of furlough a lot of people will find that they don’t have a job to go back to, this is a real disaster that’s brewing.

“It may only be 76 pence per week, but for some families that’s a lot of money.”

Finance portfolio holder, Cllr Aled Davies defended the budget and pointed out that many households in Powys pay less than the full amount of Council Tax.

Cllr Davies said:  “We do consider the affordability, it’s taken very seriously, we are investing in our communities, building homes and schools, and working with the health board to deliver health care in Newtown.”

He believed that the county needed a “strong” Council Tax base to be able to deliver the improvements over the next few years.

Cllr Davies, said: “We do try and support our council tax payers as much as we can.

“We have around 68,000 homes in Powys, around 10,000 are eligible for the Council Tax reduction scheme and some don’t pay any council tax at all.”

He explained that:

• 21,000 or 33% of the households are eligible for a 25% single person discount
• 200 properties receive 100% exemption
• 130 have a 50% discount
• 600 properties are in a disabled band reduction

Cllr Davies added: “So there’s considerable support out there. Of those 68,000 households 47.7% pay the full council tax, there’s a significant number that have a reduction.”

Calls had been made to use the reserve fund to keep the council tax low, but Cllr Davies believed the reserve may be needed in the future if the pandemic continues, and if the Welsh Government stops funding the costs of Covid-19.

A council meeting will be held on Thursday to formally set the budget.