Ministers have been accused of “misleading” the public with “inaccurate figures” about changes to council tax benefit.
The Labour leader of the council at the centre of claims made by local government minister Andrew Stunell (Lib Dem) has called on the coalition government to cease its “unhelpful” commentary which appeared to blame councils for cuts to council tax benefit and instead engage in an “open and honest debate” about the problems presented by the policy.
The row developed as the government clarified that councils would have “complete discretion” over discounts on empty homes.
Rotherham MBC leader Roger Stone (Lab) said: “The coalition government is not helping the public to understand these issues. Using figures that mislead and hide the problem…is at best unhelpful, and further confuses what is a very complex set of changes to council tax benefit, and council tax discounts and exemptions.”
Cllr Stone was responding to claims made in Parliament by Mr Stunell, below, that the authority’s £1.8m council tax benefit funding gap could be covered by using new powers to tax second and empty homes as this would raise £1.9m.
“Now that we have had a chance to work through the implications of what the coalition government is proposing, we can see this is very inaccurate, and very misleading,” Cllr Stone said.
The council’s own calculations suggest its funding gap will be at least £2.8m next year, but could be as much as £4.1m, and rise to £7.3m a year by 2017-18, once council tax rises and take up of the new council tax ‘discount’ is taken into account. The council found Mr Stunell had also underestimated the additional income from second and empty homes, but the £2.2m the council expects to raise was still less than the best case estimate of the funding gap.
Cllr Stone, below, said: “In the light of this the additional income that could be generated by the changes in discounts and exemptions will not be sufficient to close the gap. It will be nowhere near.” The council is examining other options to fill the remaining £1.9m funding gap, he said.
He added: “It has to be right that we should stop misleading the public and councils’ customers about the scale of the problem, and misleading people into thinking that councils are the source of the problem, rather than a big part of the solution, and that we start having an open and honest debate about how we tackle these issues together.”
All councils are currently designing localised council tax support schemes which are set to replace the national council tax benefit scheme from April and which must address a 10% cut in council tax benefit funding.
Council are set to get new powers to tax empty properties with a 150% council tax rate and to scrap discounts for second homes, but local government requests for councils to be given full discretion over council tax support discounts – including those for pensioners and people living alone – have been refused.
However, the Department for Communities & Local Government has written to councils to make it clear they do have “complete discretion” over discounts applied to empty homes. Officials issued the clarification after authorities asked whether they could vary empty homes discounts for short periods of time rather than scrap them all together.
The letter said: “Ministers have carefully considered these representations. In keeping with the spirit of the proposed reforms, the government intends to allow councils complete discretion over the level of council tax discount and the time period for which it may apply”.
In response to Cllr Stone’s criticisms, a DCLG spokesman said: “This reform will give local authorities a financial stake in the provision of support for council tax, and a strong interest in helping to move local taxpayers into work, and reduce dependence on support. Local authorities will have choices about how to design their schemes and manage the reduction in funding. They will, for example, be able to choose whether some awards should be reduced, or whether to use their flexibility over council tax, reconfigure some budgets or use reserves.”