Bristol’s poorest households at risk of having benefits slashed to pay council tax due to funding crisis

About 18,000 of Bristol’s poorest households could be forced to sacrifice some of their benefits to pay towards council tax for the first time in years because of the local authority’s funding crisis.

About 18,000 of Bristol’s poorest households could be forced to sacrifice some of their benefits to pay towards council tax for the first time in years because of the local authority’s funding crisis.

Bristol City Council is proposing to cut £3million from its council tax reduction scheme (CTRS) as part of a range of cost-cutting measures to meet a huge financial shortfall. It means the 18,000 families who currently pay nothing could be asked to contribute 10 or 20% from April 2024 under plans put forward reluctantly by the Labour administration, a council meeting heard.

A further 5,000 working-age adults claim a discount, based on income and benefit allowances. About 13,000 pensioners in the city receive support to reduce or cover their bills, which is not under threat because of government policy, although this has to be paid for out of council coffers, amounting to £13million this year out of the scheme’s £42million total costs.

Bristol is the only major city to have kept the full reduction in place, but the authority is proposing £45.7million of cuts to services in its annual budget, which will be set in February, as it faces a funding gap of between £37.5million and £87.6million from 2023/24 to 2027/28.

Deputy mayor in charge of finance Cllr Craig Cheney told a budget scrutiny meeting on Wednesday, November 23: “It has been a red line for us. When we were in trouble in the past we looked at it briefly but as soon as we realised we had additional business rate income we were able to pull back from a saving.

“We don’t want to do this again. It’s a saving for next year which gives us the opportunity to work through how that might work and how we as a council work a way of delivering something that is still helpful to citizens at a time when we just don’t have the money to do what we’ve always done before.

“It’s something close to my heart personally, it’s something I’ve fought for and argued for over a number of years, and to have to put it forward is emotional. But we are where we are. This is our biggest area of discretionary spend and we just need to consider it.”

Opposition Green Cllr Martin Fodor said: “It’s a measure of how dire things are that this is back in consultation. To cut this support is really worrying.”

City Hall on College Green

Other cost-cutting plans in the budget include reducing business rate relief for charities from 100 per cent to 80 per cent and halving the authority’s contribution to the local crisis prevention fund, which provides discretionary emergency payments for essentials and household goods for people in financial hardship.

Labour Cllr Tim Rippington said: “All of this money goes to the poorest people in the city. To take this money away is going to have impacts in other areas that will almost certainly end up with us spending money we don’t have.”

Cllr Cheney replied: “I agree. Everything we’re doing at the moment feels like it’s going to have a cost in the future.

“That’s the problem with national thinking, which appears to not understand the system – if you fail to spend here, the cost pops up somewhere else and sometimes more.”

Finance director Denise Murray said the proposed £3million cut outlined in the draft budget was just one idea and would result from people who currently pay nothing contributing 10 per cent of council tax bills, while a 20 per cent charge would roughly double the savings.

She said: “The proposal outlined gives an illustrative approach, so it says there’s an approach to have a more targeted scheme as opposed to one that looks purely at income, and ‘more targeted’ means there’s the opportunity to think more about targeting to those with children, disabilities, so you can focus it more to get to those that need it.

“Or you could have the opportunity of just having a contribution from all, and that could range from 10 per cent to 20 per cent which would be in kilter with other similar schemes.

“The nature of the items here demonstrate the scale of the challenge, that we have to put forward the things that are discretionary for consideration, and this is one of the areas of discretionary spend that Bristol City Council is doing over and above other authorities.”

She said any final proposals would be produced by a group of scrutiny councillors and officers and would require a 12-week statutory consultation next summer.