Liberal Democrat peers are poised to revolt over plans to localise council tax benefit (CTB) schemes from next April, amid concerns the move would have ‘a disproportionate effect' on working-age families.
Lord Greaves, who helped develop the Liberal Democrats community politics strategy, described the proposals as ‘the poll tax all over again' in an interview with today's Financial Times newspaper.
News of the planned rebellion, during the report stage of the local government finance Bill, comes despite news the Government has allocated an additional £100m transitional relief funding to help authorities deliver CTB programmes. In exchange for a share of the new cash pot, ministers expect councils to cap the amount paid by residents no longer exempt from local charges to about 8.5% of the full council tax rate, it has emerged.
The government had initially planned to trim £470m from the welfare bill in 2013/14 by cutting 10% from the annual costs of CTB and making local authorities, rather than the Department for Work and Pensions, responsible for delivering the benefit, while protecting pensioners from charges. Speaking at an MJ event earlier this year, then local government minister, Bob Neill, insisted there was ‘no wriggle room' for councils seeking extra help.
However, Department for Communities and Local Government officials believe ‘under any capping approach' low-income households totally reliant on benefits would be asked to make some contribution towards their council tax bill – it is understood.
Councils undertaking consultations on new CTB schemes have already estimated how much of the newly imposed levies may not be collected. Darlington MBC in the north east and the Wyre DC in Lancashire expect only half the additional council tax charges to be paid while Harrow LBC calculates only a third of the taxes will be returned.
Conservative flagship borough Wandsworth LBC has decided not to charge unprotected working-age claimants because the legal costs of recovering sums owed would be too high.
President of the Local Government Association, Lord Best, will today put forward an amendment giving councils the freedom to make the necessary CTB savings by reducing the single person discount from 25% to 20%.
Shadow communities and local government secretary, Hilary Benn, said the fact so many councils are predicting high levels of non-payment ‘shows that the government simply hasn't thought this through'. ‘Eric Pickles' poll tax is unfairly targeted at people on low-incomes,' said Mr Benn.
In response, local government minister, Brandon Lewis said: ‘It is right that our reforms help reduce the deficit by giving councils a financial stake in getting spending on council tax support back under control and helping people back to work and off benefits.'
