Many people who were formerly exempt from paying now face court, as the bedroom tax adds to spiralling debt burden.
When a court summons for unpaid council tax arrived in early July, last year, Jan Campbell, 49, of Barnsley, south Yorkshire, panicked. “It was terrifying. I thought I was going to lose my home. Her mental health problems drastically worsened, and her family encouraged her to stay with them in Northampton. The court date came and went, and the judge waived the £100 court costs, but granted an attachment of benefits order, which deducted £12 of council tax a month directly from Campbell’s benefits. She’s struggled to make ends meet ever since. “I’m having to sell things. I’ve got nothing left. Everything went in 2012. To be part of society you have to have these things, and you can’t afford them.”
With government cuts to means-tested council tax benefit, many people are now facing liability orders for arrears. From April 2013, the government slashed funding for council tax benefit by £500m, and instructed local authorities to decide how the reduced benefit should be distributed. The poorest residents, unemployed, disabled or low paid, now find themselves paying council tax where previously they were exempt.
Many people, like Campbell, have simultaneously been hit by other welfare cuts. In a three-bedroom home, the bedroom tax shortfall and council tax swallows up a quarter of her benefits even before any of her bills are paid. “That’s a whole week out of the month. It’s not supposed to go on that. What do they expect me to do?” She was able to claim Discretionary Housing Payment (DHP) to cover part of the bedroom tax, and with the help of Unite the union, won an appeal over one room that was too small to be classed as a bedroom.
Pauline Jones, 54, was also hit with the double blow of council tax and bedroom tax after she had downsized from a three-bedroom house to a two-bedroom in South Ockendon, Essex. Struggling before the £22 monthly council tax bill and the £14 weekly bedroom tax reduction, she’s resorted to using food banks to keep herself afloat. After a councillor visited recently to inform her the DHP scheme is meant to be used as a stopgap, rather than a long term solution for financial problems, she’s terrified – Jones had successfully applied to the scheme when the bedroom tax deductions left her struggling with the rent. “I’m dreading the future. I suffer with anxiety and I’m really tired. I get this feeling in my stomach, and I wonder what they’re going to do next. I feel like I’m begging. It’s humiliating”.
When I speak to Jones at home, her friend Martine tells me she’s in the same situation. Forced to cut back on everything, she can’t even afford fuel to cook: “I just live on sandwiches. It feels like persecution”. Before Christmas, both women received letters from Thurrock council with the message: “Do not overindulge over Christmas! You must pay your rent.” It seemed like a particularly cruel joke. Jones doesn’t drink or smoke, and rarely goes out any more.
On the morning of the autumn statement, Tottenham magistrates court is busy – the waiting room is full of Enfield residents struggling with the effects of Osborne’s benefit changes since they were introduced in April. Council officers wait for residents, who have been sent summonses for non-payment of council tax, to arrive and patiently begin to negotiate payment plans. Most who arrive are confused, occasionally argumentative and can’t understand why they suddenly have to pay council tax when their financial situations haven’t changed. Within an hour, 34 people have arrived, but I’m told overall it’s a quiet day – in the run-up to Christmas, they’ve issued fewer summons. Enfield has experienced a 62% increase in liability orders in the first six months of 2013, according to an FOI request by anti-cuts campaigners False Economy. Other boroughs, such as Knowsley in Merseyside, report a 99% increase.
One of the residents is an unemployed single father with three children. Able to negotiate a payment plan for the current council tax arrears totalling £170, he’s still worried about his outgoings, and is struggling to make ends meet. “The money, when it comes in, is just like water,” he tells me. “My eldest has just turned 18, so whereas I used to get £165 a week, I’m down to £103”.
One 21-year-old on income support is typical of the cases: having never paid council tax before, she’d assumed the letters informing her of an outstanding council tax bill were an administrative error and ignored them. Now, with a summons in Tottenham, she’s nonplussed. The amount agreed per week, £3.60, seems small and she’s able to manage it because she’s single and has few outgoings. Those in the room with dependents are on tighter budgets, and already struggling – an extra few pounds a week has to be deducted from part of an already tight budget, and this usually turns out to be food.
On top of the arrears, residents also have to pay court and administrative costs, which differ from borough to borough. The Enfield residents in the court waiting room who hand me their summons have costs of £95 added, but in neighbouring Haringey, they’re charged £125. Residents who fail to keep up with payment plans will find themselves back in court, and with costs added each times, will find their debts spiralling.
The sums seem small on paper, but to the unemployed and low paid, day to day, they’re untenable. Already on subsistence benefits and faced with rising living costs, even £3-5 is a big dent in a very meagre weekly budget.
As with the bedroom tax, the people receiving these bills previously weren’t charged because they didn’t have the means to pay. Their financial circumstances haven’t improved, they’ve only worsened as the cost of living has risen, but they’re expected to find even more money from ever-squeezed budgets.
Across the country, every poverty charity, MP and council official I spoke to repeated the same message – this is only the first wave of summonses: as the policy takes effect, and as more people struggle to keep up with payments, the courts will find more and more of the poorest in society in their courtrooms. As early as October 2013 Labour estimated that 450,000 vulnerable people had been summonsed as a result of the withdrawal in council tax benefit, and many more have been summonsed since.
Campbell doesn’t feel particularly optimistic, and when asked about her neighbourhood, and the mood in Barnsley as a whole, she paints a grim picture: “We feel so trapped. It doesn’t seem to matter how good a person you are, how hard you try. I’ve put so much into society, tried so hard as a mother. There’s one rule for the rich and another rule for us. The young, single parents especially, their situation is even worse. It’s making people ill, it’s going to create a sick society. I wouldn’t be surprised if there’s a repeat of the riots around here, because the amount of anger and fear in Barnsley is incredible, people are so desperate”.