Tuesday, 2 October 2012

Council Tax Benefit Replacement; It Moves On...

So, we've talked about this before haven't we, this replacement for Council Tax Benefit that's coming up? Although I'm not sure I've mentioned on here the council's consultation exercise that's still going on, although I have mentioned it on Facebook and Twitter quite a lot.

By the way, before I go on, this consultation exercise is still going on and I strongly advise you to go along to one of the remaining events. It's a different exercise to the one about three months ago so don't go thinking that just because you went to one of those that it's not worth going to one of the second tranche. Also, there are various questionnaires as well as the events. Anyway check the link if you haven't already, it's worth it.

So, the point of this post is that yesterday I went to the consultation event at Bulwell Riverside. I'd decided I had to go but wasn't looking forward to it because there was a strong chance that one of my mortal enemies from Employment Tribunal days would be leading the event. As it happened there wasn't but there was the chair of Nottm City Unison branch in attendance and...me.

That's right, just me. And a union bod. And the two peeps doing the presentation. You wouldn't think that, for decades Bulwell flew in the face of conventional politics by repeatedly electing a Communist then Green to the City Council would you? Where were you all?

Whinge aside, I did attempt to live tweet the event and if you want to see that it's here. It also forms the basis of the rest of this blog.

So, yeah we arrived and said our hellos. The event leaders said they weren't Council Tax/Benefit bods but were part of the policy team but were confident they could still manage technical questions. In all honesty they did a pretty fair job of it.

They started off by quickly going through the background stuff which was on the website. The first useful fact that popped up was that there were 19k households in Nottingham currently receiving maximum Council Tax benefit, all of whom, 'if' the proposals for the new scheme were adopted, would all have to suddenly find AT LEAST 20% 0f their full Council Tax, much more if your property is band C or higher. This will vary from about £160 to £2,200 per year. When you're on Income Support/IBJSA/IBESA. Do NOT be property rich in Nottingham next April.

Another important issue that came out fairly quickly (because I asked about it) was the fact that NCC's proposals envisage ringfencing the cuts to central government funding to current Council Tax Benefit recipients alone. I suspected this all along, after all they played a similar trick with Supporting People funding.

We then got a bit more into the nitty-gritty and I challenged a couple of points -

I said that it couldn't be justified to ignore war pensions as income in the apparent economic climate. Initially they said the law required the council to do so but, after a short discussion, they accepted this wasn't correct.

I then asked if the individual proposals had been costed, I was told they had been but they weren't available at the meeting. They did confirm that the total savings amounted to the £6m needed and they agreed to email me the full calculations.

I then questioned the lack of any mention of the new powers to remove discounts for second homes and long term empty buildings. I was told this was being considered but was 'separate'. I made it clear that I thought this was unacceptable because it gave the impression that there was no alternative to recouping the cuts in central funding from benefit claimants whereas, in fact, there was a new source of income that could be used to offset some of those cuts. I got the distinct impression that plans to utilise these measures were well underway but that any savings were going elsewhere and us benefit claimants were on our own. This one might be a runner...

Perhaps one of the most disturbing admissions came when I suggested that, if they were going to slap a load of new charges on extremely poor people than, by application of advanced 'blood from a stone' theory, collection rates may well take a nosedive. They admitted that internal discussions had suggested that collection rates of around 70% were likely. Council Tax collection rates are currently well into the 90-95% range. That's not so much a nosedive, more jumping off a cliff.

It's fair to say nobody at NCC likes this situation. That said, I'm not so sure there isn't a truckload of cynicism going on. It should be remembered that the poorest and most vulnerable among us are less likely to vote, take part in consultations or fight back against cuts until it's too late. This is exactly the group who are bearing the brunt of these cuts. Personally I don't think that's a coincidence.


I did a couple of back of envelope type calculations/estimates. Firstly, I reckon that removing the 50% discount for second homes would raise around £600k to offset the cuts. Secondly, bearing in mind that there are 19k people currently receiving full council tax benefit, I estimate that the absolute minimum the new proposals will save from this group alone is around £3.5m. And the assumptions I made in that mean it is a ridiculously conservative estimate indeed.



Thanks to Jean in the comments for pointing out that second home discount is in fact normally 10% so my above estimate is clearly wrong.

In addition I have found a previous FoI response from the council which provides an estimate that £77k/yr could be raised by removing the second home discount. It also provides an estimate of a further £2.179m if all empty homes discounts were removed. As such there is a potential £2.256m that could be raised from empty homes.

There will be many arguments for not removing some empty homes discounts entirely but there is clearly potential extra revenue here. personally, if nothing else I cannot see any argument for keeping any second home discount at all under the current financial climate.

Note also that the above only refers to removing discounts. It will also be possible for councils to charge greater than 100% for some long-term empty properties. Considering the significant desirability of policies disadvantaging keeping residential properties empty I would hope that extra charges of this nature would be a shoo-in, although how much extra it would raise I don't know.

1 comment:

jean said...

Second home discount is 10%.