London borough facing £3m shortfall in council tax benefit shake-up

Published by Max Salsbury for 24dash.com in Housing and also in Central Government, Finance

Islington Council says it's facing a £3m shortfall in funding to support residents with their council tax as a result of Government reforms.

The Government is abolishing the current scheme where councils receive rebates on the financial support they provide. Instead, it has told them to come up with their own schemes from next April, cutting expenditure by 10% and handing them the money to administer it.

It has also told them to protect pensioners from cuts, leading to fears that areas with a high proportion of elderly residents will force bigger cuts on working-age claimants.

As a result of the changes, Islington has warned that residents could end up paying more council tax with some paying it for the first time.

The Government says the new local schemes will better target support, reduce fraud and should incentivise work. It also argues that by giving councils capacity to change their current discounts and exemptions for empty and second homes - and through the local retention of business rates - local authorities will be able to offset the reduction in expenditure.

Cllr Catherine West, leader of Islington Council, said: "We're on the side of residents in these tough times and are concerned that under these government proposals, many people in Islington may have to pay more council tax, or pay council tax for the first time.  

"If the Government proposals go ahead we will ask our residents for their views on a new support scheme when we consult later this year."

The council is now writing to council tax benefit recipients in Islington who could be affected.