Cap-for-funding deal announced
Ministers have announced additional funding for council tax benefit claimants who face having to pay the charge for the first time.
The government has announced transitional funding worth £100m for councils which limit the amount residents currently exempt from council tax must pay in the future.
Under the one year arrangement, local authorities which limit the charge to 8.5% or less of currently expemt residents’ liability when they introduce their localised schemes in April will be eligible to a slice of the funding.
Councils who ensure the ‘taper rate’, the rate at which council tax benefit is reduced in order to take into account income, is not above 25% will also be eligible for the funding, as will those who ensure “there is no sharp reduction in support for those entering work”.
The announcement of additional funding for the controversial policy to localise council tax benefit comes ahead of a key Lords debate due to take place on Tuesday evening.
Labour peers are expected to call for the debate, including votes on several amendments to the government’s proposed legislation, be put back to a later date following the government’s announcement of additional funding.
In a statement, local government minister Brandon Lewis said the government, while allowing “flexibility”, did not expect council to impose “large additional increases” on people receiving council tax deductions for non-dependents.
Addressing concerns that many people asked to pay small amounts of council tax for the first time will not make the payments, he added: “Councils will rightly want to avoid collecting small payments, and it may consequently be better value for money for councils to avoid designing schemes which seek to do so.”
Chartered Institute of Public Finance and Accountancy chief executive Steve Freer said councils were already preparing schemes for the “poisoned chalice” of council tax benefit localisation and “for the government to suddenly announce its own strong view about what constitutes a good local scheme, and to make that a qualification for transitional grant, is a huge, confusing u-turn”.
Mr Freer said councils whose schemes did not fit with ministers’ preferences “will face very difficult choices”.
“Do they remain faithful to their local scheme, modified or otherwise following public consultation, or do they attempt to switch tracks to a new scheme which accommodates the Government’s preferences and attracts a slice of one-off funding?”
Details of funding levels and timetables for applications are to be published “shortly”, according to the Department for Communities & Local Government, with applications expected to be made before 31 January and payments made in March.
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