The number of Sunderland homes which qualify for help with council tax has surged since the start of lockdown.
Figures from Sunderland City Council have shown the number of households eligible for help with bills rose by more than 15 per cent following the start of the coronavirus pandemic, which has hit the employment prospects of workers across the country.
And now bosses have warned the hit to Wearside’s families could have further knock on effects for the city’s finances.
“The number of people coming into the [Council Tax Support] scheme because of their financial position changing has increased, it’s gone up by about 15 per cent since the start of the pandemic,” said Jon Ritchie, the city council’s executive director of corporate services.
“It’s not an exact position because one of the key drivers for assessing the local Council Tax Support scheme is the outcome of Universal Credit applications, which take about five – six weeks from application to notification, so we know there’s quite a number of people who are in the process.
“The longer term impact of that on the council’s budget will be a reduction in the council tax base because more people are on the Local Council Tax Support scheme, which is a cost to the overall budget of the council.”
Ritchie was speaking at last Friday's meeting of the city council’s audit and governance committee, which was held by videolink and broadcast via YouTube.
According to Ritchie, before the Covid-19 outbreak there were about 16,000 people paying less than £150 in council tax, meaning their bills were cut entirely thanks to the government’s Hardship Fund scheme.
A further 4,000 were eligible for the full £150 assistance on offer.
The city council has estimated it could be facing a financial hit worth about £40 million due to lost income and increased costs incurred due to the pandemic.
So far the government has promised £21 million over three rounds of funding, but city leaders continue to push for more to close the gap.
Cllr Paul Stewart, the council’s cabinet secretary, said: “If you don’t ask the government for additional funding then you won’t get additional funding, so we continue to press that point until our costs have been covered fully.”
