Labour Get Extra Funding To Increase Council Tax Benefit

Back in January, when Labour announced how they were going to deal with the localisation of Council Tax Benefit (now called Council Tax Support) and the 10% cut in funding that came with it, they decided to impose 20% charges on all unemployed and some disabled people in the city, whilst neighbouring councils absorbed the cut into their budgets, possibly in expectation that 84% of people would be unable to pay the charge and that court action would be financially unviable. Strangely, having cut the amount of benefit being paid, the coalition offered some transitional funding worth £2.1m for one year to reduce the amount cut. At the time, the Labour council here turned this down due to the conditions attached to accepting the money.

Yesterday however it was announced that Labour have now decided to accept this money, reducing the charge from 20% to 8.5%. This is an excellent move by the council, even though the money is only for one year, it provides breathing space for claimants who are already struggling with food, rent and energy price rises, a real terms benefit cut and for many the bedroom tax as well.

In January, the refusal of this money was justified on the basis that there would have to be an average 8.5% charged across all groups (except pensioners, who the coalition exempted from any possible charge), and that this would mean charging some of the severely disabled people that are currently exempted. Secondly, it was said that the council would need to find an additional £1.3m to reduce the charge to 8.5%.

Cllr Ian Cruise on twitter said that:

The Govt blinked first under pressure from BCC leadership. We still have full exemptions for pensioners, vulnerable etc…. the exemptions set out in the Motion to council stand. This is extra money

This is good news for claimants, who will presumably receive an updated bill shortly. The council say that details will be released soon. For anyone who cannot or will not pay this charge, it also means that it will take even longer for any court action to become financially viable. At an average of less than £2.50/week, the debt will build up slowly, court action costs thousands of pounds to undertake so whether the council will ever prosecute claimants in this position remains to be seen. If they do then there is possibility of jail. From a financial perspective, it costs £40,000/year to keep someone in jail, so it would be cheaper for the taxpayer to forget this debt rather than lock someone up.

We are still waiting clarification on whether the council will need to find £1.3m from somewhere else to cover this reduction, as they said they would in January, but this is a good move to accept the money on offer. We are not going to pretend that an 8.5% charge is good though, it isn’t. No claimant should be paying council tax and we would like to see the Labour party joining in the fight for alternatives to austerity rather than passively passing on cuts made by the coalition.

Advertisement