LGA DEMANDS CONTROL OVER COUNCIL TAX RULES

FIRST PUBLISHED BY: LOCAL GOVERNMENT CHRONICLES

THE GOVERNMENT MUST SCRAP BLANKET COUNCIL TAX DISCOUNTS OR THE POOREST WILL FACE HUGE BILLS.

That warning has come from the Local Government Association, which said more than two million people who are either low earners or young and unemployed could have to pay an average of £247more in Council Tax each year. Control of entitlement to the benefit is due to pass to councils next year. But the government will impose a £500m cut, equivalent to 10% of the total available.

And it has ordered that discounts cannot be reduced for single people regardless of income or for currently eligible pensioners, as well as suggesting that vulnerable groups such as families with children should be protected from any reductions. Ministers have claimed that councils could make up the shortfall by cutting discounts for second homes and empty properties.

But LGA chair Sir Merrick Cockell (Con) rejected this: “The poorest regions and the most vulnerable people will be hardest hit by this cut unless the government offers councils more flexibility over all forms of Council Tax discount. “It is the only way that councils can ensure that the greatly reduced funding for Council Tax benefit is targeted at the local people who need it most.” Without this, the £500m cut would prove “impossible to deliver” except through service cuts, higher overall tax rates or the higher charge for working poor people and the young unemployed, he warned. Sir Merrick added: “The Treasury has made the cut and left councils to make incredibly tough decisions and face the inevitable fallout.”

The LGA arrived at its £247 figure by taking Department for Work and Pensions statistics, published only at UK level, which show 5.9 million Council Tax benefit recipients, of whom 2.2 million are aged 65 or over and 1.7 million are families with children. The first group must be protected, and it has assumed that councils would wish to protect the second, leaving 2.0 million working age benefit recipients to share the £500m cut, an average of £247 each. For England, the figure would be roughly £210. David Magor, chief executive of the Institute of Revenues, Rating and Valuation, said: “The shortfall in England will be £437m, and the government has said second and empty home discounts could be worth some £420m. “The trouble with that is that it is ‘lumpy’ at local level. If you have not got many second homes you will have to cover the gap from something else.”

Councils in places such as the south west, with both low income levels and high numbers of holiday homes, might make the equation work, but those in older industrial areas could struggle, he said. Local government minister Bob Neill said: “The government has no intention of letting councils abolish vital discounts like those for single person homes.

“Spending on Council Tax benefit has more than doubled since 1997. The Local Government Association needs to realise that councils accounts for a quarter of all public expenditure and they need to play their part in tackling the deficit.” He added: “We are giving councils a strong incentive to put in place a better and fairer local Council Tax support scheme based on local priorities that means they can help more residents get back into employment, protect the vulnerable and reduce the spiralling benefits bill.”

The Local Government Finance Bill, which would give effect to the changes in Council Tax benefit, is due for debate in the House of Lords this evening.

READ WHAT: ERIC PICKLES ‘SECRETARY OF STATE’ SAYS ABOUT OVER-CHARGED COUNCIL TAX.

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