Council Tax Benefit scheme plans now revised

By on 24/12/2012 in Deputy Leader, News

Proposals to reduce benefits in Birmingham have been revised following public consultation - but government cuts to funding still leave the city council with no alternative but to cut support to some of the city's poorest families.

Councils are being required by government to administer and take up responsibility for council tax benefit as of 1 April 2013; and the funding to councils will be cut by 10 per cent – which means a £11.08million shortfall in Birmingham.

Consultation on a draft Council Tax Support Scheme for Birmingham ran for three months from September, and a report to the council's Cabinet on January 7 proposes further mitigation in light of extensive feedback from the public.

The revised scheme now includes protection for claimants who are in receipt of Employment and Support Allowance (ESA) and who in addition also receive a qualifying disability premium.

Protection will also be provided for claimants who receive a carers premium.  The minimum amount that people who are not in the protected categories will have to pay will now be set at 20 per cent rather than the originally proposed 24 per cent, directly as a result of the consultation feedback.

Other mitigating measures announced in September will still be included in the scheme - meaning pensioners (including claimants of working age in receipt of a war pension), people entitled to a disability premium, families with children under the age of six and families with a disabled child of any age are protected in that their benefit will be calculated based on 100 per cent of their Council Tax liability rather than 80 per cent. A hardship fund of £1million will also be made available.

In total, the consultation, which ran from 10 September to 2 December 2012, attracted 2,700 telephone calls, 8,000 webpage visits, 1,300 formal online responses and over 200 people attended five public meetings that were staged across the city.

Cllr Ian Ward, Deputy Leader of Birmingham City Council, said: “We simply have no choice but to make changes to our benefits system because of cuts that are being imposed upon us by national government.

“If there was any way we could maintain the existing scheme, we would, but the sums do not add up. This is one of the most difficult policy decisions we have ever faced.

“However, we have listened to public opinion and attempted to do everything we can to soften the blow, and can now offer some further concessions to protect some of Birmingham's poorest and most vulnerable families at a time when they need as much help from us as possible.”


Notes to editors

1. The Government first announced its plans to abolish council tax benefit and replace it with a local scheme to be administered by local authorities in the Comprehensive Spending Review 2010. But it is the Local Government Finance Act 2012, which sets out the requirements for local authorities to introduce a local scheme from 1 April 2013.

2. Birmingham City Council currently administers council tax benefit on behalf of the Government's Department for Work and Pensions and receives funding for the benefit it allows. Council tax benefit is means tested and is paid to low income households to help them meet their council tax liability. In 2011/12 the council awarded approximately £100million of council tax benefit to around 135,000 council tax payers.

3. The key themes that have emerged from the consultation exercise are as follows:
•    Of those who completed the survey, 70% are current recipients of Council Tax Benefit.
•    45% of respondents agreed that Birmingham City Council is adopting the correct approach keeping the cost of the scheme within the government funding.  35% disagreed whilst 20% did not know
•    Of those who disagreed with the councils approach 60% stated services should be cut further and 48% favoured a council tax increase. (Respondents were not restricted to one or the other answer)
•    86% supported the protection of vulnerable groups particularly those with disabilities and disabled children
•    Throughout the consultation exercise (particularly during the public consultation meetings) there was significant feedback in respect of those on Employment and Support Allowance(ESA) and carers
•    67% support for the reduction in empty property discounts to zero
•    76% support for the introduction of a hardship fund
•    48% opposed to the reduction of backdates to one month, of those who disagreed 47% believed backdating should exceed 3 months whilst 45% believed it should be limited to 3 months
•    49% of respondents thought that claimants of working age should pay at least 24% or more, whilst 34% thought the proposed 24% is too high, 17% did not know.

For more information please contact Kris Kowalewski on 0121 303 3621

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