Lucy Phillips | 2 August 2011
Plans to give local authorities full responsibility for council tax benefit payments were announced today.
Under the proposals, councils will be tasked with reducing the £4.8bn annual council tax benefit bill by 10%, deciding at local level who should no longer receive the subsidy.
Local authorities are currently responsible for council tax rates and collection but do not control benefit policy, which is set by Whitehall. Some 5.8 million people currently claim council tax benefit across Britain.
Today’s consultation, Localisingsupport for council tax in England, seeks to bring all aspects of the council tax system together. The changes, due to be introduced in 2013/14, sit alongside the government’s wider welfare reforms to end dependency on benefits and make sure it pays to work. Pensioners would be protected from any reductions in the payment.
Communities Secretary Eric Pickles said the proposals would give councils an incentive to get people back to work because they would keep any savings. It would also push local authorities to tackle benefit error and fraud which is estimated to cost about £200m a year.
Pickles said: ‘The new system will be a fairer one, where hard-working families and pensioners are not left to pick up a spiralling benefits bill and where work always pays.
‘Councils will be much better placed to attract new business and industry, better placed to help their residents get off welfare and reap the benefits of work instead. They will directly benefit from improving the prosperity of the local area that will in turn drive down their benefit bill.’
Pickles added: ‘Local authorities will have much greater freedom to administer rebates in a way that best meets local needs and best supports local people whilst safeguards will be put in place to protect the most vulnerable, including pensioners, from any reduction in the support that is on offer.’
The change, originally announced in the October Comprehensive Spending Review, has been opposed by the Institute for Fiscal Studies, which says it will penalise poorer households.
