Require councils to suspend council tax payments during the coronavirus outbreak

During the coronavirus outbreak it is important that people have money for essentials such as utilities and food. The Government should require councils to suspend council tax payments, and directly fund local government operations, for the duration of the outbreak.

The Covid-19 outbreak has far-reaching consequences beyond public health. The Government has therefore put in place an unprecedented package of support for individuals and households affected by the outbreak.

The assistance that the Government is providing is targeted to protect those most at financial risk due to the impact of Covid-19 on the economy. It includes a wide range of support mechanisms to protect people’s incomes during the Covid-19 outbreak. The Coronavirus Job Retention Scheme helps firms to continue to keep people in employment through cash grants totalling 80% of employees’ wages, up to a monthly cap of £2,500. The scheme will be open initially for at least 3 months and will be extended for longer if necessary. Similar support is also being provided to those who are self-employed, or partners in businesses, through the Self-Employment Income Support Scheme. Those eligible for this scheme can be paid grants worth 80% of their trading profits, up to a maximum of £2,500 per month.

Protections have also been put in place for homeowners and renters experiencing financial difficulty due to COVID-19. Following discussions with the industry, mortgage lenders are offering a three-month payment holiday for affected homeowners and landlords whose tenants are experiencing payment difficulty. Through the Coronavirus Act 2020, we have legislated to delay when landlords are able to evict tenants. Landlords cannot start proceedings to evict tenants for a three month period and the court service has suspended all ongoing housing possession action for 90 days from 27 March.

To support those on low incomes through the outbreak, the Chancellor has also announced a package of temporary benefit measures. The Government has increased the standard allowance of Working Tax Credit and Universal Credit by £20 a week. There has also been an increase in the Local Housing Allowance rates for private renters claiming Universal Credit housing element or Housing Benefit so they are set at the 30th percentile of market rents. Self-employed workers whose income has been affected by Covid-19 will also see their Minimum Income Floors relaxed further, so that their Universal Credit award can be increased to reflect their lower earnings.

The Government has also moved rapidly to provide a £500 million hardship fund to local authorities in England. Our expectation is that local authorities will use the majority of this fund to provide council tax reductions to economically vulnerable people and households, with a focus on working age recipients of Council Tax Support. Many councils are also applying local level discretion in their approach to council tax collection, including the opportunity for individuals to set up flexible payment plans and suspension of enforcement action. Individuals whose income has been affected by Covid-19 can check their eligibility for Local Council Tax Support schemes or flexible approaches to payment by getting in touch with their councils. People who can afford to pay council tax should continue to do so to ensure that services, including social care for the elderly, can continue to be provided in these unprecedented times. The Government does not consider that a general council tax holiday would be appropriate.

For more information about measures to support individuals and businesses affected by Covid-19, please see https://www.gov.uk/government/publications/support-for-those-affected-by-covid-19 and https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses.

And for information on measures and guidance for local government, please see https://www.gov.uk/guidance/coronavirus-covid-19-guidance-for-local-government#local-government.

Ministry of Housing Communities and Local Government