The Public Accounts Committee has published its 48th Report on Council Tax support.Accounts, today and said:
"When the Government transferred responsibility for Council Tax support to 326 local authorities in April 2013 it intended that the reform supported the work incentives it seeks from its wider welfare reform.
But we found in 19 local authority areas, up to 225,000 people could lose more of their earnings – as a result of Income Tax and National Insurance contributions combined with the withdrawal of Council Tax Benefit and Housing Benefit – than under the previous national scheme.”
As a result , for some, work doesn’t pay under the new scheme.
- Some of those 225,000 people stand to lose 97p for every extra £1 earned – a fundamentally perverse result.
- Many local authorities have passed on some or all of their reduction in funding for Council Tax support to local claimants by reducing entitlement to support.
- Around 230 local authorities introduced schemes which required claimants to pay minimum Council Tax payments. Of these, 133 local authorities offered no protection to vulnerable groups, other than pensioners and war pensioners.
The report’s recommendations include developing a coherent set of guidelines which set out the extent of local authorities’ discretions and obligations, and how the DWP will respond when it considers that local authorities’ actions jeopardise the achievement of its objectives, especially on welfare reform and incentives to work.
It should also assess the combined impact of Council Tax support and other welfare changes on demand for local authority services and the funding of local authorities to help inform government’s future decisions on funding changes affecting local authorities, including how the impact varies across local authorities.
For more information go to http://www.parliament.uk/business/committees/committees-a-z/commons-select/public-accounts-committee/news/council-tax-support-report-publication/