Government fails in bid to block council tax benefit review

Published by 24publishing for 24dash.com in Housing and also in Central Government, Communities, Local Government, Universal Credit

The Government failed last night to block a bid by peers ordering Eric Pickles to commission a formal independent review of council tax support three years after its implementation.

The amendment - tabled by Labour peer Baroness Hollis of Heigham - was successfully voted in favour by peers - despite attempts by the Government to block it. 

Critics of the reform – which is devolving the benefit to councils from next April and cutting the funds by 10% - point out that cuts will be pushed onto low-income working age claimants as pensioners will be protected.

Thus, those who have never paid council tax could find they’re liable for payments of up to £200 a year.

Introducing the amendment, Lady Hollis said she was concerned individual schemes would rely on how financially well off councils were rather than on particular individual need.

She said: "...richer authorities are keeping the national scheme - essentially, the social security system - because they can afford to. Poorer authorities are not, because they cannot."

She said the schemes did not represent efficiency and value for money. "From the local authorities' point of view, we risk poll tax mark two. Up to 2 million families may be paying for the first time towards their council tax. Set it too high - a 30% minimum, as is the case in several authorities in Norfolk - and families cannot pay. Set it too low, after the transitional grant at £1.50, and the council cannot collect. On the one hand, families cannot pay; on the other, councils cannot collect."

She also pointed out that housing associations will be dealing with seven different council tax benefit schemes, each of which may be different for each of the next three years.

The amendment was also supported by crossbencher Lord Best, Lib Dem peer Lord Shipley and Labour peer Lord McKenzie.

Lord Best warned that the various welfare benefit cuts introduced since 2010 – with the largest still to come – “are bound to have a cumulative effect”. “Thus, many of the 660,000 households affected by the forthcoming 'bedroom tax' will also be caught by having to start paying council tax from the very same day-1 April 2013,” he said.

The parliamentary under-secretary of state, for the Department for Communities and Local Government (Baroness Hanham) tried to block the amendment.

She said that in the first instance it is for councils to keep the schemes under review. She said: “The Bill requires each billing authority to do just that, each financial year, and to consider whether or not to revise or, indeed, replace its scheme, which a local authority is entitled to do.

“I am not convinced that a major independent review as a set stage is required or, indeed, that it would be particularly helpful for local councils. Therefore, noble Lords will not be surprised when I say that I cannot accept the amendment. However, I recognise that it is right and proper for the Government to keep the framework in which councils operate under review. I can confirm that we will take steps to do this. We are already considering with local government what minimal data we will require from councils to enable us to keep this policy under review. I have no doubt at all that local councils will keep us informed of how it is progressing.”

Peers voted 203 to 165 in favour of the independent review.