16 October 2012
GREEN Party leader Natalie Bennett has today highlighted the government’s as yet little-noticed cuts to council tax benefit, saying that they are going to create a “postcode lottery” that could have serious social consequences.
The government has “localised” payment for the benefit to the councils, meaning they will get only 90% of the funding for it that they do now, and as a fixed grant, rather than a reflection of the benefit cost. The government has also directed that pensioners should continue to receive it.
This means that in some areas without many pensioners, councils are likely to set the payments for households of working age at a low level, in other areas where more pensioners live, much larger.
Natalie said: “Council tax benefit provides nearly £5 billion of support to low-income families, with 5.9 million recipients. Almost half of this goes to the lowest-income fifth of households.
“There are problems with the current benefit – notably that only about two-thirds of people entitled to it claim it – but the new system threatens to introduce many new ill-effects.
“It will incentivise councils to discourage low-income families from living in the area, and is a disincentive to encourage take-up of support. More, it will encourage internal migration to areas of highest benefits for working age households – disrupting communities, the lives of families and their support networks.”
There are also going to be significant administrative costs attached to the new scheme. Councils are now developing their own means tests to decide benefits, and will be making their own calculations of payments.
Natalie added: “Councils will also face trying to collect relatively small sums of money from households that simply don’t have it. As the Institute for Fiscal Studies has pointed out, this will be extremely difficult, and costly.
“Households trying to survive on Job Seekers’ Allowance – currently £71 for a single person – are going to find it extremely difficult to pay an extra £3 or £5 a week, which they look set to face in some areas.”
Chair of the Association of Green Councillors, Andrew Cooper, comments:
“It is bizarre that a government which supposedly believes in universal benefits is promoting a patchwork of different council tax benefit systems in councils up and down the country. This cannot be regarded as fair or equitable The government says this inequitable policy is all about ‘localism’ and allowing Councils to set their own rates but this argument does not stand up to any degree of scrutiny.
“Councils receive vastly differing levels of support from central government and this is by no means related to the levels of poverty in each authority. Imagine the outcry if the government established different regimes for income tax in different councils right the way across the country. It would be interesting to see where members of the Coalition Cabinet migrated’ to under such a system.”
Green Party leader Natalie Bennett is visited Redhill yesterday to highlight the impact of the cuts. Redhill, covered by Reigate and Barnstead Borough Council, is represented by three Green Party councillors, Jonathan Essex, Sarah Finch and Bryn Truscott. http://www.jrf.org.uk/publications/reforming-council-tax-benefit