Friday 10 August 2012

Replacing Council Tax Benefit

As you've probably heard, Council Tax benefit is to be abolished from next year and councils are being charged with devising their own local schemes to replace it. Big issues include the fact that central government will be cutting support for the new schemes by 10% of what they are paying now and that, for rather obvious political purposes, councils are being told that pensioners' entitlements must be protected. This of course means that if the cut in central government funding is passed onto claimants in its entirety it will fall disproportionally on those of working age.

Unfortunately, this appears to be what NCC is planning on doing and they seem to be buttering us up for such an eventuality, see this article in the Post for an example. It also matches up with what I am hearing is being discussed in local Labour Party meetings.

The thing is, there is absolutely no reason why any cut has to be ring-fenced to the the benefits budget. It could be covered wholly or in part by cuts elsewhere, this is a decision that NCC is supposed to make. Instead they appear to be blaming it entirely on central government (whose fault it is mostly, granted) yet they have the power to mitigate the cuts if they choose to do so. A similar situation occurred with Supporting People. NCC claimed the cuts were forced on them but the reality wasn't quite as simple as this; again funding for Supporting People was no longer ring-fenced so councils could choose to spread the cuts over other service areas. NCC chose not to.

NCC has also announced an 8 week long consultation process about the changes. Government guidelines normally recommend 12 weeks for a consultation exercise but NCC claims this won't give them enough time to draw up the draft scheme. This consultation was supposed to start on Monday 6 August according to the above Post article and this page on NCC's website, although the portfolio decision says the 9th. Either way, at the time of writing this, details of the consultation have yet to be posted on the website.

This consultation needs to be closely watched and responded to. You might be interested in a Facebook group that has been set up to campaign against the cuts.

I set out a few issues below which I suggest people think about. I've not thought them through fully myself as yet but it's something to get the ball rolling -

  • The idea that the cut in funding should be ring-fenced should be resisted strongly. It's probably unlikely that we could ever persuade NCC to offset the cut entirely elsewhere but there's no reason why it shouldn't be in part.
  • The current national Council Tax Benefit scheme is hardly generous as a starting point so any cuts to the scheme will be hitting the poorest hardest.
  • NCC needs to remember that, if cuts mean that Council Tax liability increases for the worst off, income-replacement benefits such as JobSeekers' Allowance will not be increased to make up the difference. It is therefore likely that such extra liability will simply not be paid and costs for enforcement will increase. It is a false economy to implement a scheme that will simply leave a hole in the budget.
  • NCC is claiming that the cut in central funding will leave the council £6m worse off. I've asked for a copy of the analysis that produced this figure but obviously I haven't got it yet. Last figures for CTB expenditure I saw was around £31m for 2010, which could be in the region of £40m by 2013 with no change. As such, until I see all the figures, I can't see why a cut of anything more than around £4m is expected.
  • NCC needs to be creative in its design of the new scheme. I've heard rumours that nobody will be entitled to 100% benefit anymore which would be a huge mistake. NCC needs to consider placing a higher burden on those with savings, possibly a more aggressive income taper etc before simply applying an across the board added liability to even the very worst off who currently get 100% benefit.
  • NCC has an appalling record of considering the effects of policy on disabled people. It seems to believe that the only people classed as 'disabled' are those in receipt of Disability Living Allowance. If this attitude continues it could put them in breach of the Equalities Act, as the act has a much wider definition of people classsed as disabled. In the past, people who seem to have lost out because of this blinkered mentality probably most includes long-term recipients of Incapacity Benefit/Employment Support Allowance.
That's a start, please do feel free to add any ideas in the comments and please do watch out for the consultation and respond to it when it appears.

Addendum; Comprehensive report on the effects of the 10% cut released by Institute for Fiscal Studies/Joseph Rowntree Foundation. Their section on possible options (see p68) covers similar ground to some of the points raised above and adds the suggestion of concentrating cuts in benefit on owners of larger higher band properties. Unfortunately it doesn't go into the vexed question of how much each authority is going to lose, relying on central government data which I understand is a key area of challenge under NCC's assessment. Worth a read anyhow if you have the time (note, pretty big file).

No comments: