Council leader warns MP”Working poor hardest hit” over new finance bill

THURROCK council leader, John Kent has warned local MP, Jackie Doyle Price that her support for new finance bill could see the working poor hardest hit.

Cllr Kent said: “Thurrock Council has been seeking better recompense for the amount of industrial and commercial premises in the borough since the law was changed. This is not a political issue, both parties have sought changes.

However the Local Government Finance Bill does not really suggest localising business rates – which were nationalised by the last Tory Government in 1990. This current Bill gives many new powers to the Secretary of State who will still ultimately decide how much money councils have. It is adding more complexity to the system already in place.

The government wants to use local government finances in 2012/13 as a baseline – after two years of deep cuts and a two year council tax freeze has reduced our funding by 20 per cent — a fifth .

I believe any new system should restore funding to its 2010/11 cash level. This should then be used as a baseline for future grant allocation from 2013 onwards.

The Government says it wants to “reset” the system every ten years. There is a real danger this will not properly account for any loss of a major employer in an area – which would lead to a loss of business rate income.

The Bill also proposes to “localise” Council Tax Benefit and to cut the benefit by £500m – 10 per cent, as part of these plans.

Government has promised it will give protection to pensioners and to the single person’s discount. That means local councils will have very little flexibility about how to apply the cut in funding for council tax benefit and so will have to hit the working poor hardest. This runs completely counter to what the government says it is trying to do in its welfare reform programme.

After years of asking, this is a very small step in the right direction, but I fear that by making the system more complex it will be two steps back as well as the small one forward”

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