Latest Council Tax Blackmail Wheeze

*awakes from slumber, yawns*

Sorry about the lack of postings, this is due to my ongoing mental decrepitude. I had thought of retiring the blog permanently as I don't really have the energy to keep it going on a regular basis but, well, let's see...

For now, I want to alert you to NCC's latest wheeze to heap pressure onto people who can't pay their Council Tax. NCC is proposing to report non-payers to Credit Reference Agencies (CRA), something which they accept that no other council does nor is thinking of doing. Part of their justification is a suspicion that people pay other debts before their Council Tax in order to not end up with a CRA entry.

Ok, well assuming people are that daft, won't that actually make things worse? Dodgy loan companies will be able to see than applicants have been prepared to miss CT payments to pay off low priority debts and will see them as a safer bet. Remember, many lenders do not use CRAs to tell if a person is 'financially responsible' they use them to risk assess whether the applicant is likely to repay that particular debt and whether they are a person they can make a profit from. Hence the fact that you can always get credit, just that the worse your credit file, the less likely your kneecaps are to survive the experience.

Perhaps more importantly, if you sign up for a loan or credit card you sign up to T&Cs that allow the lender to pass your details to CRAs, otherwise they would be in breach of data protection rules. No such agreement is entered into with Council Tax as payment is a statutory requirement i.e. you are forced, rather than agree, to pay. Therefore it is my belief that NCC would be in breach of the Data Protection Act if it were to pass details of non-payers to CRAs.

We should also remember that a big part of the reason for high numbers of non-payers is NCC's decision to widen the paynet to include a minimum 20% charge even to those of us who are on Income Support levels of income. Much bleating about cuts to central funding and how they 'cannot afford' to provide services, while at the same time refusing to accept that we cannot afford to pay despite real terms cuts to our benefits. Hypocrisy to the max and demonstrative of Nottingham Labour's fetish for threatening and punishing the poor.

I strongly recommend that you respond to the 'consultation' on this proposal and tell them what an illegal unjustifiable measure it is.

Will NCC Pick Up the Crumbs from Central Government for Council Tax?

As the consultation exercise for the replacement of Council Tax Benefit nears its end two things spring to mind.

Firstly, NCC has not responded to my FoI request for the costings of the individual measures they propose in their new scheme, impairing my ability to respond properly to the consultation (some might suggest this is more than a coincidence. Worth noting that the facilitators at the consultation event I attended promised to forward this info too but no cigar). Secondly there seems to have been a bit of a panic at the Department for Communities and Local Government.

Possibly following evidence of panic at local authorities who are preparing for large rates of non-payment (NCC said at the consultation event that they are expecting collection rates to drop to 70%. But then they also said they'd send me a bunch of costings...), DCLG have announced a £100m transition fund which authorities can apply too to offset the cost of schemes that protect the poorest.

If this money was divided up among all authorities in proportion to their share of council tax benefit expenditure it would provide something approaching an extra £800k for Nottingham. However, there's no telling whether this is how it is intending to allocate the money and not all councils will be eligible because their support schemes don't fit the criteria which are;

• those who would be on 100 per cent support under current council tax benefit arrangements pay between zero and no more than 8.5 per cent of their council tax liability;

• the taper rate does not increase above 25 per cent;

• there is no sharp reduction in support for those entering work - for claimants currently entitled to less than 100 per cent support, the taper will be applied to an amount at least equal to their maximum eligible award.

That first one is going to prove tricky for Nottingham because, as we've seen, they intend to make those even on maximum help pay 20% of Council Tax. I've estimated that this measure alone is likely to raise £3.5m so a grant of £800k isn't likely to tempt NCC to join in. Furthermore, it is a one-off transitional fund and NCC is likely to see that as saving problems up for the future, as they have done with the government grants for freezing Council Tax.

So my guess is the they will snub it. In fairness it is crumbs from the table and likely designed to embarrass councils like Nottingham when they don't join in. On the other hand, I can't help feeling they should clutch every straw that comes our way.

I think it is well worth anybody going to the last listed consultation event tomorrow (10am Loxley House) and bringing this up. I will try to go myself but the usual health issues make this probably unlikely.

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.

Note

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.

Hmmm.

Addendum

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.

Council Tax Benefit Replacement; Progress, of Sorts...

We have a new Portfolio decision, re-announcing the consultation on how to replace Council Tax benefit with a local scheme as required by government. The consultation itself hasn't started yet, that's due on 3 September, about 4 weeks later than it was due to start. The irony of course is that the consultation period is only 8 weeks long when government guidelines suggest 12 weeks as a minimum. They are again justifying 8 weeks on the basis that they won't have time to formalise the scheme otherwise but, if they had only got the consultation out on time instead of just dicking about...

The decision does include important information about some of the main proposals for the scheme. Some of these are pretty horrific and include;

• A maximum discount of 80% liability. Yes folks, NCC is taking us right back to 1990 where everyone 'has to make a contribution' of at least 20% of their council tax. That's a massive hole in the budget right there because it won't be collectable.
• Almost as bad is installing a cap on your discount at Band B rate. This is preposterously low. It is likely that many authorities will attempt to focus cuts on higher value properties but remember, Band D is supposed to be the mid-point of Council Tax liability.
• Reducing the upper capital limit from £16,000 to £6,000. This is the sort of amendment I feel able to support, or at least disagree with the least. 
• Removing second adult rebate. Frankly hardly anyone claims this so I doubt that will make a huge amount of difference.
• Removing backdating. This is simply petty and small-minded. NCC is planning to make savings at the expense of the vulnerable who might have problems making a claim e.g. those with mental health issues and those who are unaware of their entitlements. It's a fucking disgrace.
• NCC will continue to fully disregard all war pensions. I'm sorry but this cannot be justified and appears to have been included purely for ears of PR reasons. This is not something they have to do now so why they are continuing to do so in the extreme circumstances of the new local scheme and its attendant cuts is beyond me.

So, there's only really one aspect proposed above that is anywhere near reasonable. The decision also repeats as fact that NCC will lose over £6m in central government support. I still haven't received a response to my FoI request on how this was calculated and until I do I cannot agree that the loss would be any more than £4m. Given the drastic nature of the cuts as described above I can only assume that NCC is intending to make larger cuts than is required in order to bail out other areas of expenditure, then blaming central government. Another PR bonus.

One other thing. Whoever drafted that portfolio decision talks throughout about people claiming Jobseekers Allowance, Employment Support Allowance and Housing Benefit etc. However, when this new scheme arrives in 2013, these benefits will be replaced by Universal Credit. Not mentioning this does suggest that the author has arses and elbows issues.

Compare NCC's approach to Broxtowe Borough Council's. Now I realise that the two authorities are very different in size and economics but BBC have proposed keeping the council tax support scheme the same as Council Tax Benefit is now and covering the loss in central government grant by increasing charges on empty properties and second homes. Now Broxtowe probably has significantly more scope to do this than NCC but NCC doesn't appear to be taking such measures at all. That's simply not good enough.

So watch out for the consultation going live and do respond. NCC is dumping the problem on the worst off and that must not be allowed to happen. If it does I suggest you all move to Broxtowe.

Council Tax LOLs

Article in the Evening Post about how NCC took a disabled man to court over £1.75 unpaid council tax, thus adding £60 costs to the debt. Read it and weep.

The article says that the bloke was already paying back an earlier year's council tax debt but NCC still went ahead with pursuing this further debt at the same time. This is an issue that advice agencies have been bringing up with NCC since Poll Tax days.

Council Tax now comes under Lisa Black's empire. Go figure.

Compulsory Direct Debits? Shurely etc

Article on Indymedia today about somewhat dodgy wording in a letter from the NCC Council Tax goons.

It seems that they may have let their enthusiasm for direct debits run away with them, the letter says;

"In order to pay next year's Council Tax and make it as easy as possible you need to pay by Direct Debit."

You could be forgiven for taking this to mean that its compulsory to pay your Council Tax by Direct Debit, not least because thats what it actually says. Yet of course this isn't the case at all.

To be fair there are legitimate reasons for the Council to encourage direct debit payments, on the other hand there are legitimate reasons for people being unhappy with the direct debit system. For instance the Indymedia poster mentions Virgin Media...

But its wrong to give the false impression that something is compulsory when it isn't. There are laws telling us what we must do and laws that tell us what we can do and NCC shouldn't get them mixed up.