By Richard Johnstone | 5 March 2013
More than half of the town halls developing new Council Tax Benefit schemes to take effect in April will receive cash to keep bills down, local government minister Brandon Lewis announced today.
All 195 billing authorities that bid to the £100m transition fund, set up to ease the localisation of the previously national benefit, have been awarded the money. The councils, which together claimed more than £50m, represent around 60% of those responsible for setting up schemes.
The remainder of the fund has been awarded to 91 precepting authorities – county councils, police and fire authorities – whose bills will also be included in the new regimes.
Central government funding for council tax support is to be devolved from April, but only after it has been cut by 10%, or around £470m. Councils have had to either devise new eligibility criteria to close the funding gap, or provide additional cash themselves.
Ministers announced the transition fund after Lewis told PF last October that some authorities had developed plans that were ‘not acceptable' to government.
Following the cut in support, people who currently receive 100% council tax support are likely to have to pay some of their bill. Some councils had been preparing to charge residents as much as 25% of their liability.
But to qualify for funds from the one-year transition pot, councils had to agree to cap charges to residents who previously paid nothing at 8.5% of the total. They also had to guarantee that the taper rate at which support is removed would be no higher than 25% for those whose income increases, and that there would be ‘no sharp reduction’ in support for those entering work.
Localisation of council tax support would encourage councils ‘to take a stake in their local economies and get people back into work’, Lewis said.
‘There is a real incentive for councils to make savings in the new localised system by cutting fraud and error. These savings may not be delivered immediately so this funding helps councils while they design more sophisticated local schemes.’
He added that government spending on Council Tax Benefit had risen from £2bn in 1997/98 to £4.3bn in 2010/11, and the reform would also save money for taxpayers.
Among the individual allocations, two billing authorities – Durham County Council and Liverpool City Council – will receive more than £1m from the support fund.
Three of the precepting authorities have each been awarded more than £1m. The Greater London Authority will receive almost £2m, Kent County Council more than £1.8m and Norfolk County Council above £1.2m.
