Funding launched to localise Council Tax

Tuesday March 5th, 2013

Government Opportunities (GO) All 195 billing authorities that bid for transition funding to help them in the first year of running Council Tax support will receive money.

Council Tax benefit spending doubled from £2bn in 1997 to 1998 to £4.3bn in 2010 to 2011, which is one of the reasons the government has made welfare reform a vital part of how it tackles the deficit.

The localisation of Council Tax support will help tackle the deficit, delivering savings of £470m a year of taxpayers’ money, and it will give all councils stronger incentives to cut fraud, promote local enterprise and get people back into work.

Under the new localised system, councils are legally responsible for drawing up their schemes. The government made transitional funding available to help councils develop well-designed schemes that maintain positive incentives to work. 195 billing authorities, 60 per cent of the councils responsible for agreeing local schemes, submitted claims totalling over £50m.

The criteria set out that the voluntary grant was made available to councils (billing and major precepting authorities) who choose to design their local schemes so that those who would be on 100per cent support under current Council Tax benefit arrangements pay between zero and no more than 8.5 per cent of their Council Tax liability.

The taper rate does not increase above 25 per cent and there is no sharp reduction in support for those entering work – for claimants currently entitled to less than 100 per cent support, the taper will be applied to an amount at least equal to their maximum eligible award.

The government introduced plans to localise Council Tax benefit through the Local Government Finance Act. From April 2013, Council Tax benefit will be replaced by local Council Tax support schemes.

There will be no change to the level of support provided to pensioners, and councils will become responsible for designing and administering schemes for working age claimants.

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