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Benefit claimants face 30% cut

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Council tax benefit claimants could see their hand-out slashed by nearly 30% if ministers push through proposals to localise the benefit, a council has warned.

Nottingham City Council said it had “serious concerns” about ministers’ proposals to localise council tax benefits and that claimants which are not exempt faced severe cuts.

Ministers want to devolve the council tax benefit from the Department for Work & Pensions to local authorities and cut overall funding for the benefit by 10%.

But Nottingham said because many claimants, such as pensioners, will be exempt, others will face a far greater than 10% hit with some claimants facing a 28% cut to their benefit.  

Nottingham deputy leader, Graham Chapman (Lab), added: “The plans are set to increase the financial risk to local authorities.

“Currently the system is demand led. Councils would now have to manage possible financial pressures. These pressures may also have an impact on council tax levels if overall demand increases about government predictions.”

Ministers unveiled plans to localise council tax benefit from 2013-14 last month and are currently consulting on them.

Communities secretary Eric Pickles said the move would safeguard the interests of vulnerable people and pensioners by maintaining national criteria for certain groups.

The new arrangement will see councils handed control over council tax benefit, currently run centrally from Whitehall, but they will have drive out efficiencies of 10%, around £480m, as part of the deal.  

The consultation said: “Given the government’s concern that pensioners remain protected - and its interest in the level of protection provided - it is proposed that government will prescribe the criteria, allowances and awards for council tax support to pensioners which local authorities will need to provide for in their local schemes.”

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