Poor ‘will take out high-cost loans to pay council tax bill’

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FORMER council tax benefit claimants will turn to doorstep lenders or high street money shops in a bid to meet local authority demands, according to the charity which tries to help those in financial trouble.

Citizens’ Advice Bureau chiefs in Yorkshire say some poor families will “store up problems for later” by taking out high cost credit to pay the council, while many of those affected “still do not even recognise” they will have to pay.

Matthew Bennie, the director of Doncaster’s Citizens’ Advice Bureau, said although the bills had been sent out, many of those affected “would not realise” they were expected to find the cash themselves.

Mr Bennie said he and his staff feared a flood of calls for advice would come in when final demands began being issued, while some people would take out high-cost credit in desperation.

He added: “We have not seen much demand for help yet, but we expect that to change in the next six months. We recognise that it is going to affect a large number of people in Doncaster.

“We are looking at a large increase, not only for council tax benefit inquiries and problems, but also for the changes in benefit for overuse of rooms, the so-called bedroom tax.

“We also anticipate an increase in debt as people try to find money from other sources to pay the bills, which will then escalate what will already be quite difficult financial liabilities.

“What we are hearing is people aren’t even recognising that this is happening, and when the demands come in they will go down to a High Street lender or elsewhere to take out a high-interest loan.

“In Doncaster alone there are 11 of those sorts of outlet in the High Street area and we think that people will turn to those kinds of lending – storing up even more problems for later on.”

Councils have already reported a huge spike in people contacting their advice services for assistance on benefit changes, with the Leeds service seeing an 85 per cent increase in telephone calls and a 95 per cent increase in walk-ins at its “one stop centres”.

The political leaders of Yorkshire’s major local authorities have angrily turned on the Government over the withdrawal of council tax benefit, saying Communities Minister Eric Pickles has forced them to do his dirty work.

The leader of Leeds Council, Keith Wakefield, described the new move as “a poll tax on the poor” while Sheffield’s Julie Dore has repeatedly decried the fact that councils were being made to ask the poorest to pay.

Speaking at a meeting earlier this year, when Sheffield Council set its council tax support scheme, its finance spokesman Bryan Lodge described the Government’s move as “the most unfair cut this Government has made”.