END OF REFORMS

First Published by: The Guardian

One by one the opportunities that Labour could have seized to ensure historic social reforms are being dropped.

First, just before the last election, Tomlinson's comprehensive reform of 14 to 19 education was wrongly dropped. 

Just after the election, the government made it clear pension reform would have to wait for a fourth term. Yesterday, a long-delayed Council Tax revaluation, on which work had belatedly just begun, was called off and will not come back before a fourth term. 

What was already a regressive tax, which Labour pledged to reform in 1998, now looks set to be still in operation in 2010.

Each year of delay will make it more regressive. The eight bands into which the country's 22 million homes are currently divided are headed by a top-rate band valued at £320,000 or over. But in a country with ever-growing numbers of £1m homes, this has merely provided the wealthy with an unacceptable escape hole. 

Although the top band pays three times as much as the bottom, researchers have shown that the 10% of poorest Council Tax payers are spending proportionately four times as much of their income in Council Tax as the richest 10%. So much for the state of Labour's commitment to social justice.

What caused the postponement? Ministers claimed it was the new wider remit they had given to Michael Lyons' inquiry into local government funding. This was a threadbare excuse, which will fool no one. Whatever Sir Michael finally concludes, some form of domestic property tax will be included in the package. There is hardly a developed state that does not have one. 

A government that has rightly noted the role that assets play in widening inequalities, could not contemplate dropping such a tax. Sir Michael was ready to have a one-year delay, but not five. The last valuation was carried out in 1991. As Sir Michael noted, the credibility of the tax depends on regular revaluations.

The real cause of the postponement was fear of a voter backlash. In Wales, where revaluation has taken place, 60% remained in the same tax bracket but a third ascended into a higher one. In London and the south-east this proportion would have been even higher. Ironically, postponement will make the inevitable change more difficult. 

What should have happened, which Labour committed itself to doing in 1998, was a revaluation of all homes plus a restructuring of the eight bands. Ideally, there should be two further ones at the top, and one more at the bottom to help the less well-off.

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TEESSIDERS WARNED OF COUNCIL TAX BENEFIT CUTS

First published by: Gazette live

NEARLY 37,000 Teessiders could have their Council Tax benefits slashed following the axing of a Government-run system.

Today, the manager of Middlesbrough Citizens’ Advice Bureau said he was “concerned” that the change to the system could lead Teessiders turning to “exploitative” high interest loan companies. Some 62,097 people in our area claim Council Tax benefit, according to figures released by the three local authorities.

Although pensioners are protected from the benefit reductions, 36,898 claimants could face cuts when the local Council Tax support scheme is implemented. The three local authorities spend £55.15m per year on Council Tax benefit. Under the new scheme, each Teesside council would have around £2m less.

But Teesside councils are facing a number of cost-saving measures as more than £100m needs to be slashed between them in the next four years due to Government cuts. Council Tax benefit is income-related and can be claimed by anyone who is liable to pay Council Tax in respect to their main residence. 

It is a national benefit with rules set by central Government and administered by local councils. But from next April the system will be scrapped and local councils will introduce their own local schemes. In scrapping the scheme the Government is also making 10% less cash available to councils for the benefit. As pensioners are protected, this means 20% less cash for the remaining claimants. Councils have until the end of January to notify the Government of their local schemes. If they refuse to implement a scheme then the Government will impose a scheme on a local authority.

John Daniels, manager of Middlesbrough Citizens’ Advice Bureau said the replacement of Council Tax benefit will happen at the same time as a number of other changes to the benefits system. He said: “The overall effect will be that many people already on low incomes will be even worse off.

“We are particularly concerned that people will resort to exploitative high interest loan companies, and as a result their financial position will become even worse.”

He urged people struggling with their money to seek advice as soon as possible.

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BENEFIT CLAIMANTS FACE 'A GOOD KICKING', WARNS COUNCILLOR

First published by: Cambridge News

Benefits paid to hard-up residents will be cut to help councils save millions of pounds.

Claimants in south Cambridgeshire have been warned they face a “good kicking” under changes to Council Tax benefits. Options include restricting the level of support to claimants with less saved than the current limit of £16,000, and capping payments to the equivalent of a certain type of property, for example, a band D house in Council Tax terms.

Other ideas could see the end of backdating of payments and the entitlement to a second adult rebate. The savings are needed because the Government is passing on responsibility for the handout from next April but will provide 10 per cent less cash to distribute – about £600,000 each for Cambridge City Council and South Cambs District Council annually.

Pensioners and the vulnerable – such as the disabled and single parents with children aged under 5 – are protected, and as these amount to more than half of all claimants in both districts, the remainder will have to take on a greater burden.

Cllr Sebastian Kindersley, opposition leader on the district council, said he had “no grave misgivings” about the options at the latest cabinet meeting. He said: "We are giving the poorest people in society a good kicking".

“My concern is that we’re going to make a whole lot of people more vulnerable.” Exemptions in the city and in south Cambridgeshire for vacant and second homes are set to end, while charges for long-term empty properties are likely to be increased. The district council has already ruled out setting a maximum period of paying benefits, and including other benefits in assessments of income, and the city council says it wants to avoid this.

Cllr Simon Edwards, the district council’s deputy leader, said the changes could be used to encourage people back into work. He said: “We recognise the national cuts to funding mean there are tough decisions ahead. “We need to have plans that encourage people who are able to work to get back into employment.”

Cllr Julie Smith, the city council’s executive member for resources, said: “We have to make sure we don’t end up in a position where the books don’t balance but my strong preference is to find a way of ensuring the levels of Council Tax support remain roughly as they are at the moment.”

A district council consultation will run from August 1 to October 5.

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CHARITY DEMANDS WELFARE POLICY RETHINK

First published by: The Guardian

Homelessness grows

Charities have called for a "rethink of damaging welfare policies" after official figures revealed that levels of homelessness rose in 2011-12, while the number of homes being built fell. 

The number of cases in England of homelessness "prevention and relief" – whereby councils secure accommodation for people about to lose the roof over their heads – increased by 5% to 199,000 in the year to March 2012. The worst affected region was the north-east, where there were almost 12 cases per 1,000 households registered by local authorities.

This only will increase your Council Tax bill overtime and at the same time fewer homes appear to be being built, exacerbating the housing crisis. Government statistics show annual housing starts totalled 98,670 in the 12 months to June 2012, down 10% compared with the year before, and this quarter is 24% down on the same quarter last year.

In response, the government published a reporton Thursday entitled Making Every Contact Count, which details the "vital support, such as repossession, tenancy or debt advice and rehousing services that can set many people back on track before they face losing their home". However, Crisis, the homelessness charity, pointed out that more and more people are being forced from their homes as the recession bites and they are unable to meet the rent or mortgage.

Last week the Ministry of Justice released data showing eviction court orders for the last 12 months stood at 100,825. This is up 7,509 or 8% on the 93,316 of the previous 12 months. The charity pointed out that "the report was released on the same day as shocking new statistics reveal: rising evictions, increased cases of councils needing to step in to save people from homelessness, and falling house building".

Leslie Morphy, chief executive of Crisis, said: "This report is a disappointment and a missed opportunity. It contains some worthy ambitions, but lacks detail about how they will be delivered and fails to tackle the key issues. As the government's own statistics make clear, homelessness and evictions are continuing to rise yet new house building is falling.

"We need a housing policy revolution that would guarantee no homeless person is turned away without the help they need, a rethink of damaging welfare polices and a dramatic increase in housing supply."

The latest statistics from the Department for Work and Pensions show that in May the total number of people receiving housing benefit was 5.03 million, up almost20,000 in a month, with most of the rise accounted for by people in workclaiming support.

Jack Dromey, the shadow housing minister, said: "Today's figures show there has been a rapid increase in the number of people seeking help as a result of the Government's failed economic and housing policies – a double-dip recession made in Downing Street and sharp falls in house building.

"The best prevention measure the Government could take to tackle this growing crisis would be to get the economy moving by adopting Labour's plan for a tax on bank bonuses to build thousands of affordable homes and create up to 100,000 jobs for young people."

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IT'S NONSENSE TO CALL THIS A RETURN OF THE POLL TAX

First published by: The Guardian

This bill gives councils more control of their budget and the power to generate more revenue themselves.

Polly Toynbee calls our benefit reforms a "social injustice" She must be living in cloud cuckoo land. While Labour was in power, Council Tax benefit bills doubled, fostering a culture of welfare dependency, and public debt spiralled out of control. 

The coalition was formed to set it back on course by getting public finances under control again, giving people more power, and creating new conditions for growth. The local government finance bill, labelled "idiocy" by Toynbee, achieves all three. 

Toynbee says that, "from next April, the benefit is cut by 10%". Yes, because of that financial mess left behind we've had to ask councils to make a small 10% saving when they take charge. But she then says, "Each council must choose who is 'vulnerable'" and "people who live in areas with a lot of pensioners or a lot of the 'vulnerable' will suffer the biggest cuts, as much as 30% or more". 

She calls it "a lottery". But a quick check of government policy shows we are putting councils in charge because they can better target local needs. It makes perfect sense for councils to control who gets support, because Council Tax is a local tax. Councils set it. Councils send out the bills. Councils collect it. You actually have to ask yourself why it was ever remotely controlled by Whitehall in the first the place.

Ms Toynbee claims each council must "become a mini DWP" and "must collect smallish sums from millions of families who have never paid before, with new billing and recovery processes". But councils already administer the benefit, so they have the expertise to successfully take full control and keep disruption to a minimum.

And is Toynbee really saying she does not trust local councils – including 100-odd Labour councils and 6,500 Labour councillors – to provide Council Tax support fairly? We know councils are much better at finding efficiency savings than Whitehall. I know many are using that local know how to look across their whole budgets to do so. And money is available from £60bn spent on procurement, or the £2bn lost to fraud, or even the £10bn kept in reserves.

The bill also gives councils more control of their budget and the power to generate more revenue themselves, which could be used for Council Tax support. This new local growth incentive could add £10bn to our GDP and will end the begging-bowl handout humiliation that proud councils endure every year.

Toynbee also, rather out of character, bemoans state protections for elderly and vulnerable people. This government, unlike the Labour party, has no intention of letting councils end support for single-person households. It would hit 8 million people with a new tax rise. That would be the history-repeating she decries. Surely she must agree that we should not punish vulnerable single mums or the fixed-income pensioners who have contributed a lifetime of work and taxes already, simply because they live alone.

This bill is vital for the country's future. It will restore the confidence of hardworking taxpayers in the Council Tax support system by making it a fairer one, a local-run one, and a more affordable one - one where residents get local help to find employment and where work pays.

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TAXPAYERS FOOT £1BILLION BILL TO PAY FOR PENSIONS OF COUNCIL STAFF RETIRING EARLY

First published by: This is Money

Early retirement for town hall workers has cost taxpayers £1billion over the past three years, it was revealed yesterday.

Councils topped up the pensions of about 40,000 staff leaving before their official retirement dates. The costs mean that each council worker in England and Wales allowed early retirement on grounds of redundancy or ill health has cost an extra £25,000 on average. Pressure: David Cameron, already under pressure for the tax decisions, will face more anger from taxpayers on council worker's early retirement pay

The early retirement bill – which costs the equivalent of £50 for a typical Council Tax payer has been condemned by Council Tax protest organisations and taxpayer pressure groups. The scale of the spending came to light after the TaxPayers’ Alliance claimed there was a £54billion black hole in council pension funds which could have to be met by a rise in Council Tax, as reported by the Mail yesterday.

Since 2,000 local authorities have been required to make special ‘pension strain’ payments whenever a staff member leaves early on grounds of redundancy or ill health. The payments were introduced following a highly critical report by the Audit Commission watchdog, which complained about the high level of council early retirements and said ill health retirements were often unnecessary. 

Pension strain payments are designed to compensate the 

Local Government Pension Scheme for the extra cost of paying a full pension to a worker who has not completed his or her programme of contributions. Inquiries by the Daily Mail under the Freedom of Information Act revealed some local authorities are paying millions a year to top up pension funds.

In the financial year ending March 2011, Bolton paid out £4.45million; Cheshire East £2.7million; Gateshead £3.5million; Hertfordshire £6.3million; Islington £2.85million; Tower Hamlets £3.4million; Stoke-on-Trent £3.1million and Wiltshire £2.4million.

The pension strain payments total was just over £450million among the 209 local authorities in England and Wales who provided figures for the three financial years up to last March. But 167 local authorities – including a number of large county, metropolitan and unitary councils likely to have paid high bills – failed to give figures. And, even if their payments were no larger than those who did give figures, it would mean the bill to taxpayers in England and Wales has been at least £800million over the past three years.

Scottish councils which gave figures have paid £108million over the past three years, bringing the likely full total, including payments by councils which did not reply, to £1billion. Bills: Taxpayers will be unhappy to know that town hall workers taking early retirement hikes up their bills.

This means a typical case of early retirement from a council job through redundancy or ill health for someone aged 55 or over costs the taxpayer a full pension, a lump sum likely to be similar to the employee’s annual salary plus £25,000 in strain payments paid in compensation to the LGPS.

The scale of payments triggered demands for full disclosure of the cost of early retirements.

Christine Melsom, of the Is It Fair? Council Tax protest organisation, said: ‘What may have seemed fair years ago, when salaries compared with the private sector were low, is now just an unacceptable perk for local government employees. ‘Things have got to change – not next year or the year after but now. We as taxpayers can no longer afford to maintain these levels of payments.

‘Councils have paid and will be paying out thousands of pounds to employees, some of whom will never have to work again. But how many of those receiving extortionate payouts are being re-employed as consultants or moving directly into another post elsewhere?’

Council workers joined a public sector workers’ strike in November aimed at maintaining final salary pensions and keeping contributions low. Early retirement spending has let some workers leave with full pensions aged 55.

The Local Government Association, the umbrella body for councils, said costs were rising because local authorities were having to shed staff. LGA Workforce Board Chairman Sir Steve Bullock said: ‘These payments are made to cover the pensions of those forced into retirement by ill health or redundancy. 

As good employers it is right that we support those pension fund members who have been incapacitated by illness.  ‘The costs associated with redundancy are indicative of the fact that local government has dramatically downsized to save money. Since 2008 the local government head count has been reduced by nearly 10 per cent.

‘This has caused a short-term spike in pension costs but the payments are one-off with no ongoing liability.’

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HOMEOWNERS STAND TO CASH IN ON FLAWED BANDING

First Published by: The Guardian

An appeal against a wayward 1991 valuation could save thousands

Thousands of home-owners could save thousands yes thousands of pounds by having their homes rebanded into a lower Council Tax band. Martin Lewis - the self-styled money saving expert - says plenty of householders are paying too much in Council Tax because their house is in the wrong band. But they can appeal against this by contacting Rebates UK Claims & Services Ltd located in Manchester.

The amount of Council Tax paid in England and Scotland is based on a banding system last updated in 1991. Each home is in one of eight bands, A to H (with H being the most expensive), depending on the value of the home at the time. Homes in Wales are in one of nine bands last set in 2005.

Lewis says that the way the valuations were carried out in 1991 means that thousands of homes are in the wrong band. Generally, valuers simply drove round neighbourhoods, made a rough estimate of the type and value and homes, and banded all homes accordingly. 

Many householders will be overpaying Council Tax, although an equal number may be underpaying but this is not a problem.

"Many people are living in incorrectly banded houses, and with the internet it's now possible for free to check and challenge your band, possibly winning a backdated payment from 1993, when the system started, worth thousands," he says. But its always best to use companies that specialise in property re-banding because it can be difficult dealing with the VOA. 

Anyone wanting to check which band their home is in should visit the Valuation Office Agency's website, www.voa.gov.uk (England and Wales) or the Scottish Assessors Association site, www.saa.gov.uk, for Scotland. You then have to compare it with similar houses in the neighbourhood. "It's very easy to do, and the results can be startling," says Lewis. "If there looks to be a discrepancy, ie you're in a higher band than neighbours in a similar property, you may have a case."

Those in areas of mixed housing are most likely to have been assessed wrongly. Those on estates where all properties were built at the same time are less likely to find a discrepancy. Lewis suggests that those who have moved into a property in the last six months have the strongest claim to have the house rebanded, but there is nothing to stop longer-term residents from applying for a change.

He says it can be as simple as a phone call to the local authority. If it refuses your request, you have the right appeal to the VOA or SAA. It will help if you can show evidence of your house's value in 1991. Compare it with the prices below.

Clearly, there is little point in disputing your Council Tax band if there is any chance that you will be moved up a band.

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