Government's extra £100m council tax transition cash 'too little too late'

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

The Government has launched a further £100m of funding to help local authorities launch new council tax support schemes from next April.

However, the additional cash - on top of the £30m of Government money already provided - was immediately branded "too little too late" by Unison who said the reform was in "chaos".

Government plans to localise the help that low-income families receive with their council tax while cutting funding for it by 10% and ordering councils to shield pensioners from cuts have been vehemently opposed.

The reform – being driven by communities secretary Eric Pickles – will see cuts passed on to working age households on low incomes and could see those who have never paid council tax previously asked to pay close to £200 a year.

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.

The Government has already provided £30 million of funding to help councils draw up local support schemes.

However, today it announced another £100m to help with the transition.

The parliamentary under secretary of state for communities and local government, Baroness Hanham, said it was “new and additional funding for local government”.

She said: “The new £100m transition grant will seek to encourage best practice. The voluntary grant will be available to councils (billing and major precepting authorities) who choose to design their local schemes so that:

• Those who would be on 100% support under current council tax benefit arrangements pay between zero and no more than 8.5% of their council tax liability;
• The taper rate does not increase above 25%;
• There is no sharp reduction in support for those entering work - for claimants currently entitled to less than 100% support, the taper will be applied to an amount at least equal to their maximum eligible award; and

“In allowing flexibility over aspects of the scheme, we would not expect local authorities to impose large additional increases in non-dependant deductions. Councils will rightly want to avoid collecting small payments, and it may consequently be better value for money for councils to avoid designing schemes which seek to do so."

She said the amount of funding for which councils will be eligible to apply and the timescales and process for making an application will be published shortly.

Baroness Hanham added: “We anticipate that councils will make applications after 31 January 2013, and that funding will be paid in March 2013. The grant will be a simple one, easy to apply for and swiftly paid out, to help those councils who choose to do the right thing.

“The Government has a clear goal in tackling the deficit, and reducing spending on benefits. This measured, transitional approach will help deliver an important programme of welfare reform, whilst still protecting taxpayers’ broader interests.”

Dave Prentis,General Secretary of Unison, said the reform was now in "chaos".

He said: "The Government needs to say that it will fully fund councils that adopt the default scheme – that will give them time to sort this mess out. Many local authorities have already published consultation proposals that do not meet all these criteria. Is the Government now expecting them to draw up new proposals and consult on them? The Government also says it is not expecting councils to apply for the grant until after 31 January.

“Budget proposals are usually done and dusted well before then, so councils may not know whether they have got this grant before they set their budgets - this must be a recipe for confusion."