Harrow council has been criticised for giving families on low-incomes no incentive to work thanks to its council tax benefit scheme.
A report produced by the Child Poverty Action Group and Zacchaeus 2000 has criticised Harrow’s council tax benefit scheme, claiming it is continuing to charge households that do not earn enough to be able to pay.
Last year, a joint report from the two organisations criticised the Labour-run council for making council tax benefit recipients pay a higher proportion of their bill than any other London borough.
A new report, entitled Too Poor to Pay, singles out Harrow’s scheme for penalising recipients who work, and for failing to provide statistics on court summonses, costs and using bailiffs.
It says: “The abolition of council tax benefit and the accompanying 10 per cent funding cut is continuing to cause hardship for London’s poorest residents.
“It has meant that 24 out of 33 London boroughs continue to charge council tax to residents previously deemed too poor to pay.”
Councils have the ability to decide the rate at which council tax support is withdrawn as earnings increase.
Most boroughs have maintained the 20 per cent taper rate that was set in the national scheme, but in Harrow this has been increased to 30 per cent.
Applicants with a disability or a household member with a disability have a 10 per cent minimum payment.
Conservative group leader Cllr Susan Hall said: “Not only does Labour’s council tax benefit scheme mean many people pay much more council tax than if they lived elsewhere in London, this latest report makes clear how Harrow’s scheme punishes them for trying to work.
“Their council tax bill is increased to such an extent when they take up often low-paid employment they are essentially taxed 97p for every £1 they earn.
“Labour’s scheme therefore provides no incentive to work whatsoever.”
Last year, backbench councillors and voluntary sector organisations in Harrow successfully challenged the borough’s plans to double the charge for disabled people to nearly £400 a year.
The Scrutiny Challenge Panel, chaired by Cllr Barry Macleod-Cullinane, created a report that made clear the serious financial difficulties claimants would experience as a result of any increase.
But the new report shows that 3,371 claimants on low-incomes are still in arrears with their council tax payments.
Cllr Sachin Shah, responsible for finance, said: “Our scheme was designed following a consultation with more than 4,000 residents, and despite the cuts we faced this year we prioritised the funding to this scheme as we know it supports our most vulnerable residents.
“As a council, we strongly believe in getting people into work, and helping young people get the skills they need for employment.
“That is why the Labour administration has supported 235 people into work, including 98 young people helped into work, training or apprenticeships, as well as starting projects such as skills training for parents on low incomes and an employment programme for people with mental health problems.”