LGA president says change will stop benefits being cut for vulnerable
Lord Best calls for council tax rise for single people
Single-person households would pay more council tax to spare millions of working age people from having their benefit slashed under proposals from the president of the Local Government Association.
Lord Richard Best, a crossbench peer, has launched a campaign to change the government’s plans to localise council tax benefit.
The government plans to scrap council tax benefit from April 2013. It will replace it with a grant that covers only 90 per cent of the cost in a bid to shave £500 million off the £4.8 billion-a-year council tax benefit bill. It would be up to each individual council to decide how to fund the 10 per cent cut, but they cannot reduce benefit for pensioners, who make up 2.2 million of the 5.9 million council tax benefit claimants in Britain.
This means working-age claimants face much higher cuts at the same time as they are hit by other benefit reductions. Landlords have raised concerns this could lead to tenants struggling to pay their rent.
Lord Best, backed by the LGA, is seeking cross-party support to amend the Local Government Finance Bill in the autumn to allow councils to reduce the 25 per cent council tax discount for single-person households.
He believes this would allow councils to redistribute money from non-benefit claimant council tax payers without having to cut support for low-income households.
Lord Best said: ‘[Cutting the single-person discount] removes the need for councils to make the terrible choices between groups in need as to who should pay.’ He also called for councils to be free to reduce council tax benefit for better-off pensioners.
Lord Best cited research from the Institute for Fiscal Studies showing that cutting the discount from 25 per cent to 17.5 per cent, excluding pensioners, would save enough money. He is in favour of cutting the discount from 25 per cent to 20 per cent for all single-person households, including pensioners.
The proposals to allow councils to cut the discount has found favour with some Liberal Democrat peers. Liberal Democrat Lord Graham Tope, speaking in parliament last month, said: ‘I very much agree… that the local authority should be given the flexibility to consider that in their armoury when dealing with this issue.’
However, many of Lord Best’s Labour peers believe council tax benefit should be administered nationally through the universal credit.
Conservative Baroness Joan Hanham, parliamentary under secretary of state for the Communities and Local Government department, has ruled out government support. She said: ‘It would be a potential tax hike on 8 million people, hitting single parents and some lone pensioners the hardest.’
estimated annual saving in Great Britain through council tax benefit reform
estimated annual saving in England
25 per cent
current discount available to single-person households
10 per cent
average cut to council tax support from April 2013