Wednesday, 20 November 2013

Council tax support scheme - making it fairer

There is a debate starting on how to make the council tax support scheme fairer - and how best to use the remaining money within the emergency hardship fund set up to help those affected by this welfare reform.

A quick bit of background. The government changed council tax benefit last year. They passed responsibility on to local councils but with only 90% of the money that the scheme cost the previous year. Cornwall Council decided to make the new scheme cost neutral - which meant that working age families who previously were deemed so poor as to receive 100% council tax relief now had to pay at least 25% of their bill.

At the same time, an emergency hardship/transitional relief fund was set up. This was £1.1 million intended to help those affected by the change. But the former Conservative leader of the council decided that it would only pay a maximum of half the council tax owed (ie at least half of that 25%) - meaning that even the poorest needed to pay around £100 or more.

However, only about £300,000 of that £1.1m fund is going to be used in the first year and we have the potential to rollover the unused money and make changes to the informal hardship fund for next year. We could also change the formal council tax support policy, but this is more complicated.

It's long been my belief that there are some families in Cornwall who are so poor that they cannot afford to pay anything towards their council tax. In those cases, it simply wastes money billing them and taking them through the court system only to find that they are ordered to pay off their debt at 50p per week or so. But the evidence in Cornwall and across the country is unclear so far. And so a formal change in the council tax support policy is likely to have to wait for another 12 months.

However, this does not mean we cannot alter the rules to use the hardship fund to help the poorest in the coming year. I believe that we should rollover the unspent money and alter the rules to allow 100% relief for the poorest households. Although the council already does quite a lot to publicise the hardship fund, I think there is more still we can do and I have asked officers to look into this.

However, an alternative idea has been put forward by the Labour group. Instead of helping all of the poorest, they want to focus support on those people hit by the bedroom tax (ie those people in council housing or housing association properties who are judged to have more bedrooms than they need and are docked some of their housing benefit as a result). The Labour group wants to use most of the money to exempt those hit by the bedroom tax regardless of other circumstances.

I happen to agree that the bedroom tax is ill thought through and penalises people who want to downsize but cannot. And there will be many of these residents who would qualify under my proposed scheme. But where I disagree with Labour is in their aim or prioritising one particular group over another, regardless of finances. In particular, I disagree that private housing tenants who where hit by the equivalent of the bedroom tax by the former Labour government, should be classed as less worthy of help than council housing tenants. I think all should be treated equally.

Both schemes will be discussed by the Finance Committee in due course before any changes are brought into effect on April 1st. However, I hope that a wider debate can be started on an issue that affects tens of thousands of households in Cornwall.

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