Conservative-run Wandsworth to protect council tax benefit entitlement

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

A flagship Conservative-run local authority says it will plough on with the current council tax benefit scheme for residents in the borough – and will pick up the tab for doing so.

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

Critics argue the cuts, and the order to protect pensioners from reductions in support, will force local authorities to seek minimum contributions from working-age households.

This could see those who have never paid council tax previously asked to pay close to £200 a year.

The chair of the Local Government Association, Sir Merrick Cockell, told the Guardian that Eric Pickles’ “poll tax is unfairly targeted at people on low incomes”.

He said: “Under the proposed scheme most councils will have to ask people on lower incomes, including the working poor, to pay more council tax than they currently do.

"Collection rates overall are very high. But there is clear evidence that, for a range of reasons including financial difficulties, the poorer people are the less likely they are to pay council tax. In their current form these changes are a significant concern."

His comments come in the wake of a series of Freedom of information requests by campaign group False Economy which found that the two dozen councils that responded were resigned to seeing swaths of residents refusing to pay the tax.

Wandsworth council – which has enthusiastically trumpeted a number of Government policies including Right to Buy and prioritising workers on its waiting list – has effectively ruled out running a new scheme, instead, largely maintaining current rules and protecting benefit entitlement at current levels.

The council said it will pick up the cost for maintaining the benefit at previous levels and its proposal is currently out for consultation.

The council proposes to make two minor amendments to the current scheme it runs and estimates the potential cost to the local authority, which will be reflected in a lower council tax base if the scheme being consulted on is introduced, in the region of £580,000.

It said part of the costs could be offset by “technical reform to the council tax system by changes to discounts and exemptions in relation to second homes and empty property”.

In a report it published in October, based on its preferred approach, it said that in an environment of welfare reform where households have already seen the level of housing benefit reduce and with further welfare reforms proposed, it was difficult to envisage householders seeing council tax as a priority debt above rent and other household essentials.

The document said: “In maintaining a version of the current scheme into the next year the council will provide an element of stability for these low income households.”

A spokesman for the Department for Communities and Local Government said: "The localisation of council tax benefit will give councils stronger incentives to cut fraud, promote local enterprise and get people back into work. It will help tackle the deficit, delivering savings of £470 million a year of taxpayers’ money. Welfare reform is vital given council tax benefit spending doubled under the last administration.

"Councils should be making sensible savings, such as cutting out council tax benefit fraud and error which costs £200 million a year.

"To assist the transition, the Government has already provided £30 million of funding to help draw up local schemes. But we appreciate savings on fraud and error may not be delivered immediately in the first year, so to assist further in the transition process, we have announced an additional £100 million of funding to help develop good local schemes and promote best practice. This is new and additional funding for local government."