Wednesday, July 24, 2024

Council Tax reform: Attack on the poor or cleaning up the welfare culture?

Council Tax Benefit reforms – a crackdown on Labour’s welfare culture or a Conservative attack on the poorest in society?

By Ed Woods

As part of the Local Government Finance Bill on the 31st March 2013 the national scheme of Council Tax Benefit is being scrapped and replaced on the 1st April 2013 by Localised Council Tax Support Schemes.

Spending on Council Tax Benefit has doubled under the previous Labour Government from £2 billion in 1997 to £4.3 billion in 2010.

The Coalition Government state the reforms will help save £470 million thus helping to tackle Labours’ deficit and they claim the benefits of a localised Council Tax Support Scheme will give councils a stake in the welfare system will assist local job creation, promote enterprise and reduce welfare dependency.

At the moment local authorities administer the Council Tax Benefit scheme using rules and regulations set by Central Government and local authorities are fully reimbursed for the benefit they pay out. This is going to change.

Instead of fully reimbursing local authorities the Government spending on Council Tax Benefit is to be cut by 10 per cent across Britain. In Thurrock it has been estimated the cut will be nearer 16 per cent leaving a £1.1 million funding shortfall.

The national rules and regulations used to calculate Council Tax Benefit are being scrapped. Outside England the devolved administrations will be responsible for deciding how to deliver these savings. In England it is the responsibility of each individual local authority to design and implement its own brand new benefit scheme.

Thurrock Council could decide to increase everyone’s Council Tax by to plug the £1.1 million gap; or cut other services or make savings elsewhere; or raid the reserves; or cut discounts and exemptions on second homes or unoccupied, uninhabitable or repossessed properties; or cut the amount of Council Tax supports it gives to those households that claim benefit. Thurrock Council has opted for the latter.

There are 14,000 households in Thurrock whose income is so low that they receive some amount of Council Tax Benefit to help reduce the burden of their Council Tax Bill. Under the reforms the Government has instructed local authorities in England that pensioners must be protected so 5,700 pensioner household in Thurrock will be protected from the cuts.

They have also instructed local authorities that ‘vulnerable’ households should be protected but have failed to give a definition on who exactly should be considered as vulnerable and protected.

This leaves 8,300 households in Thurrock who could have their Council Tax bills increased next year.

If the current proposals being consulted on by the Labour led Council are agreed by a majority of Thurrock’s 49 Councillors later this year then many of the 8,300 non pensioner households who currently claim Council Tax Benefit in Thurrock could see their benefit cut and their Council Tax bills increase, and for many, despite the ongoing consultation and wide spread publicity, the first they will know of the increase is when the bills are posted through their doors next year.

The Conservatives proudly state these reforms will help end Labour’s “something for nothing culture”. However not all Conservative Councillors are happy with what the Government is forcing on them. In Essex the Conservative Leader of Southend-on-Sea Borough Council has described the Council Tax cuts as “horrendous” and castigated the Coalition Government for failing to fully fund the new Council Tax scheme, while in Yorkshire eight Conservative led town-halls have joined forces to campaign against the cuts.

Nationally Labour has said the proposals have echoes of the poll tax and in Thurrock it could force the registered unemployed to pay at least 25% of their Council Tax – about £290 per year for the average band C property.

The Government has effectively washed its hands and handed on the responsibility, or burden, to your local councillors to decide where the cuts are falling and what householders will end up paying more.

The Conservative briefing papers on these reforms say it isn’t in councils’ financial interest to be imposing small Council Tax bills on the unemployed which cost more to collect than they raise or for councils’ to lock the working poor into poverty and low aspirations and that it will be up to local authorities to design a new benefit scheme which takes into account local priorities and circumstances.

Because 5,700 pensioner household are protected the burden of the £1.1 million cuts won’t be spread evenly across all claimants and instead can only fall disproportionately on the working poor and unemployed households of the Borough claiming Council Tax Benefit.

I doubt if any Councillors ever expected when they were elected that one day they would have to create a brand new benefit scheme and be forced to vote to make some of the poorest residents in Thurrock even poorer by cutting their benefits and increasing their debts. If Councillors sit on their hands and fail to vote on a scheme then the Government will impose a scheme on Thurrock Council so Councillors are damned if they vote for it and damned if they don’t.

Councillors also have the difficult choice on deciding exactly which working age residents they consider ‘vulnerable’ and are able to save from having their Council Tax Benefit cut. The downside is the more people they class as ‘vulnerable’ the bigger the benefit cuts for the remaining working age benefit claimants.

Thurrock Council has started consultation on its proposed local scheme on the 13th August and it ends on the 30th September 2012. The Labour run Council’s current proposals could increase the Council Tax bills for all working age claimants in the Borough, some 8,300 households, so it is important to take part in the consultation and let Thurrock Council know exactly what your views are.

Next year there is more bad news for those working age residents who claim Housing Benefit towards their rent and are living in overlarge Council homes or Housing Association properties as changes in Housing Benefit rules means the help they get towards their rent will be cut, but that’s another story.


  1. Very interesting. If we are to assume the statement is factually correct it then looks like that awful political virus (Toryididntvoteforititis) could raise it’s ugly head and haunt the vulnerable and bread liners of the borough sometime early next spring. It also looks like Dave, George and Eric (we make it up as we go along poliices) are going to hang every councillor out to dry.

  2. An attack on the poor and unemployed. Offensive and most likely costly to implement. The majority of Council’s also do not have IT equipment available to implement benefit within deadline start date according to Local Govt Assn. The populace move out of London is likely to continue and Thurrock may bear the brunt of Housing requirements.
    Council Tax benefit discretions may also go first.
    If you are in debt or suffering financial difficulties seek help now.
    Tax Aid – 0345 120 3779
    Business Debt line – 0800 197 6026
    Local CAB for Personal Debt

  3. My heart bleeds. The last Labour government were responsible for creating a low wage economy by supplying vast numbers of people to greedy employers in it only to make a profit, who are willing to work for a pittance and top up their wages using a benefit system created by the Labour party specifically to accommodate their social engineering policies. Now it’s failed. Just like their entire experiment with this country is failing all around us. Tough luck to all Labour supporters who couldn’t or wouldn’t see this coming. Then again they probably didn’t expect to lose the last election after stuffing the country full with prospective Labour voters. If immigrants moving from London don’t like paying council tax in Thurrock, let them choose another borough, or better still country, that are happy to continually support them and their families financially despite them never contributing a penny to this country.

  4. The problem is you cannot keep giving people benefits and help for eternity while others work extremely hard to fend for themselves. This idea will also make local authorities be more careful to who they are giving help to as all to often we read about fraudulent benefit claiments claiming benefits that they should not have been entitled to in the first place.
    You would think that considering Labour presided over a period of economic growth you would think that the welfare bill would have decreased yet they still managed to double it which says a lot about the way they manage money.

  5. The Labor Party are a Socialist Party and their way of thinking does not work in the real world, they have for years propped up the workshy with benefits until such time that they had no money left in the pot, instead of tackling the situation they found themselves in they borrowed to such an extent that it almost bankrupt the country, now they criticize any policy that the current government are putting forward to clear the debts without offering any credible alternatives.

    Every major political party in this country need to start to work together to save UK plc we cannot continue to pay people more money to not work than to go to work, we also need to look at the benefits that are being paid to the Eastern Europeans for families that are still in their home countries, we have over 2m unemployed people in this country but we still allow migrants access to our social care system, housing and benefits, something has to change and soon before we are oversubscribed with people in the country.

    Maybe it is time to adopt a more stringent approach to border controls and also stopping the free movement within the European Communities until such time that we are in need of a workforce, also any person wanting to remain in the UK should be able to support themselves financially or have relatives that will support them rather than living off hand-outs from day one.

  6. Unfortunately both political parties will do very little to actaully make an impact on immigration. While the coalition have started to attempt to reverse some of the decade long trends, I don’t feel they go far enough.

    I agree with you about the parties working together to find a workable solution to our economic mess. It’s not good enough for Labour to criticise George Osbourne without offering fresh suggestions which do not include borrowing even more money.

    As for this council tax benefit proposal….I hope it makes councils be more aware of who they are dishing out discounts to in the first place.

  7. The council may be worried about where it’s going to find an extra million from but what about the rest. If anyone is currently claiming council tax benefit while working, the chances are that they are also claiming, housing benefit, working tax credit, family tax credit if they have children plus childcare as well. They also get child benefit if they have children. The benefit bill has gone up by 57 billion a year on what it was in 2002. There is no way this is due to unemployment because it was going up in the false boom times under Labour. So now nobody can afford to buy a house, the governments broke, the banks won’t lend and Labour want to spend more on benefits. They have completely lost their marbles and royally screwed this country.


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