DCLG launches review into devolution of council tax support

3 Dec 15

The government has launched a review of the localisation of council tax support that will consider the impact of the reform on local government finance and whether further reforms should be made to include payments within Universal Credit.

Conservative former council leader and MP Eric Ollerenshaw will lead the examination for the Department for Communities and Local Government, which was announced yesterday with a call for evidence.

Local government minister Marcus Jones said the review aims to ensure the localised system, established in 2013/14 when a central council tax benefit was ended, is effective, fair and transparent.

Under the reform, which also saw funding for council tax support cut by 10%, councils were not able to reduce the level of support offered to pensioners when they developed schemes intended to better match local circumstances. This has led a majority of authorities to now require all working age residents to pay a proportion of their council tax liability regardless of income.

Jones said the review would consider how the change had been implemented, what it has meant for people receiving council tax support, and whether support should be part of Universal Credit payments in the future.

Council tax support is not currently planned to form part of UC, which will bring together six benefits into one payment, but its inclusion has been recommended by groups including the Resolution Foundation think-tank.

“As we continue our efforts to cut the deficit, we’re determined that support is available for those who need it most and councils, with their expert knowledge of their communities’ needs, are best placed to do this,” Jones said. “That’s why we put power in the hands of local authorities to offer local council tax support to people in their area – this independent review is about understanding how this has been implemented over the past two years, and how areas could learn from each other.”

Ollerenshaw, who served as joint leader of the London Borough of Hackney between 2000 and 2001, as part of a government intervention into poor financial management in the borough, and as Conservative MP for Lancaster and Fleetwood from 2010 to 2015, said the review would be based on evidence gathered from a broad range of sources.

“The localisation of council tax support was a significant change implemented under the coalition government,” he stated. “I urge all interested parties to make sure their voices are heard by submitting evidence to the review team. I also intend to meet with a selection of local authorities to obtain on-the-ground insight into how local council tax support schemes has been delivered to date.”

Under the terms of reference, views are sought about the effectiveness, efficiency, fairness, and transparency of the change. Evidence is also sought on the local experience of designing, implementing, or receiving support, and what the main challenges have been. Responses on the impact of the reform on local autonomy, local finances and budgeting as well as local residents are also welcomed.

Responding to the announcement, a CIPFA spokeswoman said: “CIPFA welcomes this review. As members of the council tax forum, we will work with the government to ensure the council tax reduction scheme is properly considered.”

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