Government plans to localise the help with council tax whilst cutting funding for it by 10% leave local councils with a tough challenge to design replacement schemes, according to a new report by the Institute for Fiscal Studies.
Plans are to abolish Council Tax Benefit from April 2013 and let local authorities in England, and the Scottish and Welsh governments, set up their own schemes.
Some of the key findings-
- ‘Having schemes that vary across the country will reduce transparency and increase bureaucracy.’
- ‘The cash funding cut will be greatest in more deprived areas, where spending on Council Tax Benefit is currently highest.’
- ‘the requirement to protect pensioners in England will imply a 19% cut in support for working-age claimants, on average.‘
- ‘Cutting support for council tax and localising it are two distinct policy choices: either could have been done without the other. Whether you think that cutting council tax support for low-income families is the best way to reduce government borrowing by £500 million will depend on your views about how much redistribution the state ought to do. But the advantages of localisation seem to be outweighed by the disadvantages, particularly as it has the potential to undermine many of the positive impacts of Universal Credit.’
Source: Social Welfare Training Benefits Newsletter, June 2012