PEOPLE on benefits could be forced to pay more for their council tax if a new government scheme gets the go-ahead.

At the moment, central government decides who is eligible for council tax support and how much they get.

But Westminster now plans to cut the money it hands out by 10 per cent, and wants borough councils to decide how it is handed out.

Blackburn with Darwen Council has sent a stark warning to residents.

Bosses at Blackburn with Darwen said the cut was more likely to be around 17 per cent – about £2.5million – because of the borough’s population make-up, with a large percentage of people on benefits.

They have said that council tax that is paid by benefit claimants will increase. The changes could happen as soon as 2013.

Councillor Andy Kay, head of resources, said: “This means a significant amount of funding is being taken away from our council leaving us no choice but to make more tough decisions.

In Burnley, the council is expected to face a £150,000-a-year shortfall because of the reduction in grant.

To meet this, the council has earmarked the first instalment of the council’s repayment of its deposit in Iceland, which has now arrived.