Government tax changes could mean higher bills

While the council has committed to freeze council tax for the next year, the changes – due to come into force in April - mean that local authorities will no longer be managing all of the benefits that can be claimed.

Recent research undertaken by the Resolution Foundation - a not-for-profit research and policy organisation - has suggested that this will mean millions of the poorest households will face council tax rises as councils struggle to cope with their finances, while the amount they can spend on benefits is to be cut by ten per cent.

Cllr Andrew Mobbs, responsible for financial matters in the district, said: “We are still awaiting guidance, but with regard to a housing benefit cap, the impact will be on only a small number of people as there are fewer than 30 people in the district to whom this applies.

“We are constantly looking at the implications of this on us.”

But Cllr Mobbs said that a new tax - dubbed the ‘bedroom tax’ by its critics - where council housing tenants will be charged if there are unused bedrooms in their homes, may affect a lot of people in and around Leamington, Warwick and Kenilworth.

He said: “We will bring details to the council this year once we know more about the full implications on our tenants of this. We will need to think about how we are going to organise the changes.”

He added: “We have forecast a surplus in our budget up until 2014. The council taxpayer will not feel any impact at the current time.

“All we can do is work to assist the people affected.”

Pensioners will not be affected by the changes, which ministers say will give councils an incentive to help people off benefits and into work.

Council tax benefit is currently claimed by about five million households in England. About half of these get 100 per cent support, meaning they pay no council tax at all.

The foundation’s research says that three-quarters of the 326 local authorities in England are planning to demand a new or higher payment from the lowest income households. Its findings suggest that some people’s bills could rise by as much as £600 a year.

Many in local government fear that councils will be left with a financial black hole, as the cost of pursuing those who do not pay through the courts could be higher than the revenue the authorities will raise from them in tax.