By David Williams
2 November 2010
The Institute for Fiscal Studies has warned MPs that changes
to Council Tax Benefit, outlined in last month’s Comprehensive Spending Review,
mean that local authorities have both an incentive and a means to force poor
families out of their areas.
Giving evidence to the Treasury select committee yesterday
afternoon, acting IFS director Carl Emmerson reiterated concerns about the policy, which will cut the benefit by 10% and hand it
over to council control in 2013/14.
Asked if he was concerned that councils would use the
benefit to encourage people to leave their area, Emmerson said: ‘There is a
concern that councils will have both the financial incentive and a mechanism by
which they will get low income individuals to move out of their area. That is a
He also contrasted the move, which could result in ‘over 100
Council Tax Benefit systems operating across England’, with the Department for
Work and Pensions’ proposed ‘universal benefit’ system, which he said would be
‘very transparent’ and easy to understand.
Emmerson added that changes to Council Tax Benefit would
make the benefit system ‘harder to work as a whole’ because it would complicate
decisions about moving areas to look for work.
‘I can see that those who want greater localism will value
the fact that the decisions over how Council Tax Benefit should operate will be
taken at a local level, but I can just see lots of benefits from having a clear
structure that can be integrated with other benefits.’
Emmerson also called for an interim Spending Review in 2012,
halfway through the four-year Spending Review period, to give the government
the chance to adjust its cuts programme.
He issued what appeared to be a rebuttal to Chancellor
George Osborne’s comments, that he had no ‘Plan B’ on the cuts programme.
Emmerson suggested that the government ‘should acknowledge that the world is
uncertain, that plans might need to be revised, and that a Plan B or Plan C in
its back pocket wouldn’t be a bad thing either’.