A surprise Government announcement of a £100m ‘transition fund’ to support councils that are drawing up schemes to replace Council Tax Benefit has been slammed by UNISON as ‘too little; too late’.
Last month UNISON General Secretary Dave Prentis wrote to the Prime Minister and Deputy Prime Minister warning that because of cuts in Council Tax Benefit, next April hundreds of thousands of low paid workers would face council tax increases that were bigger than any gain in personal tax allowances.
Today the Government has announced a £100m ‘transition grant’.
The announcement says the grant will “seek to encourage best practice” and will be available to councils who choose to design their local schemes so that:
· Those who would be on 100% support under current council tax benefit arrangements pay between zero and no more than 8.5% of their council tax liability;
· The taper rate does not increase above 25%;
· There is no sharp reduction in support for those entering work – for claimants currently entitled to less than 100% support, the taper will be applied to an amount at least equal to their maximum eligible award.
Dave Prentis,General Secretary of UNISON, said
‘This is chaos. The Government needs to say that it will fully fund Councils that adopt the default scheme – that will give them time to sort this mess out. Many local authorities have already published consultation proposals that do not meet all these criteria. Is the Government now expecting them to draw up new proposals and consult on them? The Government also says it is not expecting Councils to apply for the grant until after 31 January.
“Budgets proposals are usually done and dusted well before then, so Councils may not know whether they have got this grant before they set their budgets – this must be a recipe for confusion.
Notes to Editors
1. SR 2010 cut £490m from the Council Tax Benefit budget.
2. Council Tax Benefit was abolished by the Welfare Reform Act 2012.
3. Councils in England are required to draw up their own Local Council tax Support Schemes but with 10% less resources.
1. Any council that fails to agree a new scheme must adopt the default scheme – which is Council Tax benefit as we already know it.
2. Guidance requires that pensioners are protected meaning the reduction falls entirely on the working age population.
3. Most Councils began consultation on their proposed schemes between June and September 2012.
4. 800,000 people in work receive Council Tax Benefit.
5. In August UNISON wrote to the Prime Minister and Deputy Prime Minister warning that low paid workers would lose more from increases in their Council tax than they would gain from reductions in their personal tax allowance next April .
