Cuts to localised council tax benefit are set to almost double and will reach 18% by 2014-15, senior members of the LGA have claimed.
Council leaders learned of a further 8.5% cut to council tax support - on top of 10% already announced - during a meeting attended by senior LGA members, ministers and Whitehall officials held on Wednesday.
Sharon Taylor (Lab), leader of Stevenage BC and chair of the LGA’s finance panel told a meeting of the LGA’s executive on Thursday that the 8.5% cut in 2014-15, equivalent to £280m, was revealed during the Wednesday meeting with ministers and officials from the Department of Communities & Local Government.
“That is not what we were expecting,” she said.
However, DCLG has disputed the LGA’s claim.
While Cllr Taylor said the LGA had double checked the 2014-15 cut with DCLG officials since the meeting and had the figure “verbally confirmed”, DCLG issued a rebuttal on Thursday evening stating that the “overall pot [wil be] constant [at] £3.3bn in 13/14 and £3.3bn in 14/15”.
Cllr Taylor told the executive that it had also been “made clear” in Wednesday’s meeting with DCLG that the protection of pensioners from council tax benefit cuts would continue. This would mean cuts of more than 18% for other groups of claimants and the LGA intends to oppose the additional cuts in its response to the local government consultation.
The question mark over 2014-15 funding has led to fears that council tax benefit funding will be phased out following its localisation from central to local government, due to take place in April.
Mehboob Khan (Lab), leader of Kirklees MBC, said: “What’s really concerning is the…implications for council tax allowance in the future.” He told the LGA executive meeting on Thursday that sources close to the Treasury had suggested council tax benefit “would not be ring fenced” and was “likely to be reduced each year”. We hope you enjoyed the above article. To get unlimited access to all articles on LGCplus.com you will need to have a paid subscription. Subscribe now to save yourself £100 off the standard subscription rate.
A spokesman for DCLG said: “These claims are totally untrue, there is no reduction in the overall funding level for council tax support between 2013/14 and 2014-15 as set out in the provisional settlement in December, and any claims otherwise are without foundation.
“Given council tax benefit spending doubled welfare reform is vital to help tackle the deficit. The localisation of council tax benefit will give councils stronger incentives to cut fraud, promote local enterprise and get people back into work. An estimated £200 million in fraud and error was paid out unnecessarily in 2011-12
“Ministers announced an additional £100million of new funding to help develop good local schemes and promote best practice. In addition including funding for local council tax support in the business rates retention scheme means greater rewards for councils who boost their local economies.”
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