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.

Our Replacement For Council Tax Benefit Is Missing

A couple of weeks or so ago I wrote about nascent plans for the replacement of Council Tax Benefit with a new local scheme. It's gone a bit quiet.

NCC had announced plans for an 8 week consultation scheme. The Portfolio Holder decision justified the consultation period being shorter than the normally required 12 weeks on the basis that the longer period would mean the council would be unable to meet the deadline for the publication of the final scheme, which must be ready by 31 January 2013.

According to that decision, the consultation was supposed to start on the 9 August. A statement on the website, now removed, actually said it was due to start on the 6th. Either way it is now 22 August and there's no sign of it. Contacts in the voluntary sector tell me they were told the consultation has been 'delayed' and that the reasons for that were 'complicated', NCCspeak for 'we've fucked up' and/or 'we don't want to tell you the reason'.

So, a consultation exercise that was so urgent it had to be run for a period 4 weeks shorter than guidelines require has now been delayed for 2 weeks, with no explanation. That bodes well...

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).

Housing and Council Tax Benefit Decision notices

Thanks to falling on hard times I've recently had to claim Council Tax Benefit. To be fair the claim was processed fairly quickly (although the start date was wrong). However, when I received the standard decision notice something was amiss.

You see there are fairly strict laws which set out what information must be provided on a HB/CTB decision notice and one of the things that is required is notice of your right to appeal. This is important because not everybody realises that they can challenge decisions. I can only presume that if my decision notice didn't have this info on nobody else's does either.

So I dropped a little formal complaint in. Again fairly speedy turnaround but the response referred to every aspect of my letter (there were other issues around backdating and stuff which I included but weren't actually the subject of my complaint) except the issue of the decision notice. Instead they said that the three other letters I'd had from them all had their appeal rights and this is correct. They just forgot to mention the formal decision notice.

So I've emailed them back to look at it again. I'll let you know what they say. Could be quite a giggle because tens of thousands of these notices go out each year and if they're all unlawful...

What's more changes to standard letters in HB/CTB software orten take ages and lots of work. Part of me thinks I'm missing something cos it seems such a basic error and there may be a clue in the bit on the notice that says

"Please read the enclosed notes..."

Naturally there were no enclosed notes but I expect to be informed that appeal rights are explained in said notes and that NCC ALWAYS enclose them without fail. We'll see soon enough.