Proposals to localise council tax benefit could see support for some vulnerable residents withdrawn and force councils into “perilous and unsustainable financial positions”, London Councils has warned.
The plans will see council tax benefit (CTB) scrapped and replaced by a local council tax discount scheme, with an immediate 10% reduction in the amount of support given out.
But because certain groups, such as pensioners, will be protected under the plans, London Councils said authorities will either have to cut support to other claimants even further or possibly withdraw it all together.
London Councils’ chair, Mayor Jules Pipe (Lab), said the plans were designed to force councils to enact further central government cuts on their local communities.
Mr Pipe said: “Not only do these plans disproportionately punish those who need support, but they would also force councils into a perilous and unsustainable financial position.
“The impact will go far beyond just those that currently claim CTB, with a serious risk that every resident will see further service cuts.”
The lobby group also warned that there was a risk the scheme will run counter to the government’s aim of simplifying the benefits process.
“The change will be confusing for claimants as it is due to take place shortly before housing benefit – which many CTB claimants also receive – is rolled into the government’s proposed Universal Credit,” London Councils said.
Labour-controlled Nottingham City Council warned earlier this month that had said it had “serious concerns” about the proposals and claimants could face cuts of nearly 30%.
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%.