Important News from Newham Council in Support of Poorest Residents

Last month Marc addressed Newham's Mayor and councillors in support of their decision to halve Council Tax Support charges for disabled and unemployed residents and end use of bailiffs against poorest claimants.

Zacchaeus 2000 was delighted last week to be invited to address Newham’s Full Council meeting as the Mayor and local councillors decided that Borough’s Council Tax Reduction Scheme for 2019/20.  This is new territory for Z2K. Normally, we have to collect a petition of local residents to be allowed to present our case.  Even more unusually, we were speaking in support of the Cabinet’s proposal.  But unlike so many other occasions, the proposal we were supporting was a reduction in the Minimum Payment, rather than an increase.

Since the “localisation” five years ago, Newham has been one of the worst London Boroughs for Council Tax Support.  At the outset, it set a 20 per cent Minimum Payment for all working-age claimants, with disabled and unemployed residents required to pay up to £200 a year. It has also had one of the meanest enforcement regimes – issuing a court summons against nearly 30,000 CTS claimants in arrears during that period and charging the majority of those costs as well.  Worse still, it instructed bailiffs against more than 10,000 of those households.

Of course, Newham wasn’t unique in charging or using bailiffs.  But it was certainly tougher than most of its east London neighbours.  Those who have followed the political dramas of this authority will understand some of the reasons for that. Irrespective of previous administration approaches, we have been grateful for the opportunity to engage with a number of councillors in Newham, especially Cllr John Gray, who has consistently raised concerns about the scheme’s impact on his poorest constituents.

Last year, the new Mayor Rokhsana Fiaz, invited Z2K and Child Poverty Action Group in to discuss reforming Newham’s scheme.  Our starting point will always be to reinstate 100 per cent support.  Realistically, we know this wasn’t likely to happen immediately, and so we argued for a phased reduction alongside ending the use of bailiffs.  At that stage, Mayor Fiaz and her Cabinet Member for Finance, Cllr Terry Paul, were proposing halving the Minimum Payment from 20 per cent to 10 per cent, but not until April 2020.  They promised to look at the use of bailiffs too.

We were pleased therefore to see Newham’s consultation just before Christmas, proposing a reduction to 15 per cent in 2019/20 and a further reduction to 10 per cent in 2020/21. Better still, we heard that the Mayor and Cllr Paul were now proposing to implement the whole 10 per cent reduction from April this year – bringing the Council Tax bill for CTS claimants entitled to full support down to around £130.  The cost of this move is estimated at £1.349 million – a significant sum, especially against a backdrop of ongoing cuts to local authority funding.

Cllr Paul is also innovatively proposing to introduce a new threshold for the minimum level of arrears before bailiffs are instructed.  By setting this at £150, he effectively lifts the threat of bailiffs from all those in receipt of full Council Tax Support and an estimated 2,691 of those in low-paid part-time work as well.  We think this is an innovative way round what we know is a tricky dilemma.  Section 151 Finance Directors are never shy of reminding councillors of their obligation to ensure Council Tax is collected, and warn that the threat of bailiff action is necessary. Cllr Paul and his team are effectively exempting the poorest residents without conceding the principle.

Happily, Newham’s councillors unanimously backed these proposals and they will come into effect from April.  Newham now follows Richmond and Haringey in making very positive improvements to its Council Tax Reduction Scheme for 2019/20.  All three also follow the reinstatement of 100 per cent support in Camden and Hounslow, and the exemption of disabled claimants in Ealing.  From its position amongst the worst London Boroughs in relation to Council Tax Support, Newham is now set to climb up into the top half of the table.

Zacchaeus 2000 has no hesitation in endorsing this very positive package of reform.  But we don’t allow any politician to rest on their laurels.  And so, once the outcome of the local government Fair Funding Review is known, we will be doing what we can to persuade Mayor Fiaz and her colleagues to take a further step and reinstate 100 per cent support – lifting the whole burden of the Government’s new Poll Tax from the shoulders of Newham’s poorest residents.

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