Agenda item

Report of the Cabinet Member Finance

The Cabinet Member Finance took great pleasure in being able to present this report.  As members would be aware from the response provided to the question raised by Councillor Regan, the Government had decided that from April 2012, local councils would be able to set up their own local schemes for administering council tax benefit to people of working age.  The bad news was that this new arrangement was accompanied by a 10% cut in Government funding for council tax support.

Whilst he welcomed these new freedoms, he could not ignore the fact that it could potentially come at a heavy cost to some of the poorest and most vulnerable members of the community.  If the council were to recover the 10% cut from those on benefit, the cut faced by people of working age would be much greater than 10%, because people of pension age would be protected from any such cut.  This would result in taking money away from people who by their very definition were least able to meet the cost.  A decision taken within Gloucestershire councils was that the people on benefit should be protected as far as possible from the Government cut.

Following public consultation, the proposal is to do this in two stages: in the first year of localisation (2013/14) the council would continue to operate a slightly modified version of the DCLG’s default scheme, which was almost identical to the present scheme.  The council would shoulder the shortfall in income rather than passing the cost on to benefit claimants.  In Cheltenham’s case this was estimated to be £90,000, less a one-year transitional grant from the Government, which would bring this figure down to £68,000.  The means by which this money would be found was detailed in the next report on the agenda (Council Tax Discounts on Empty Properties).   Existing council tax benefit customers would be transferred over to the new scheme automatically and should see no difference in awards.  Meanwhile, over the next year, working with other Gloucestershire councils, a fully local council tax support scheme would be devised with the aim of helping those in greatest need, within the limits of the resources available.

He felt strongly that this was an issue of social justice and the council should not place the full burden of cuts on those who had the least and instead shift as much of that burden as was possible to people who were better able to shoulder it.  It was in that spirit that he put the recommendations as the best way to deal with a difficult and potentially distressing situation.

The Leader, in response to a question from another member, explained that, as demonstrated when four yearly elections had been previously considered such a move would not generate significant savings in the first year and could in fact result in an increase in costs as a result of more regular bi-elections.  In addition to this the Cabinet Member Finance suggested that benefit claimants would indeed need to wait some time before they were relieved of any financial burden if four yearly elections were adopted to generate the savings required. 

Upon a vote it was unanimously

RESOLVED that;

a)     The Department for Communities and Local Government (DCLG) default scheme be adopted as the Council’s Local Council Tax support scheme for working age customers in 2013/14.

b)     War widows and war disablement pensions in the local council tax support scheme for working and pension age customers as currently happens for housing and council tax benefit be disregarded in full. 

c)     Work commences on developing a robust council tax support scheme for working age customers, to take effect from April 2014, which reduces the council tax support costs, protects vulnerable people as far as possible and keeps work incentives.