Localisation of Council Tax Support: DCLG Response

| posted in: Universal Credit | 6 Comments

You will probably be aware that the DCLG released its response to the consultation on the localisation of council tax, available here.

Previously, Policy in Practice has said speculatively that we struggled to see how local authorities would be able to meet the requirements of the consultation set out by DCLG, while also meeting the requirements set out by the DWP.  The only possible solution would have been to apply deductions in council tax support ‘at source’, while significantly restricting support to working age claimants and raising the administrative burden for local authorities and claimants.  It appears that this is the solution the government are pressing ahead with.

A summary of the key points:
  • DCLG intend to proceed with plans to introduce localised schemes in 2013-14, ready before the launch of Universal Credit.
    • 29% of respondents though that local authorities should have almost complete discretion
    • 17% thought that schemes should be administered nationally, through Universal Credit (UC), a further 9% though that local schemes should be aligned with UC
  • The government recognises that local authorities will need support in the design of these schemes
    • Billing authorities will be the default lead authority for council tax schemes
    • Local authorities will need support to develop tools to to model the caseload, based only in part on the previous years caseload
    • Billing authorities will have to consult on the proposed schemes with precepting authorities and members of the public on, for example
    • Categories of claimants entitled to a reduction in council tax, the size of the reduction and arrangements for risk sharing
  • Support is expected to be provided as an up front discount to the (probably monthly) council tax bill
    • Funding will be paid on an annual basis to major precepting authorities
    • Authorities will be able to provide additional support on a discretionary basis
  • The administration of schemes will need further work
    • Local authorities will need to outline and consult on the procedures for making applications and appealing decisions
    • DCLG will request that the DWP share data, to minimise duplicating work for claimants (ATLAS, LACI, LAID, ETD, CIS, Hubs)
  • The government will assess the impact of housing benefit centralisation and transitional costs of moving to new arrangements
    • This is to avoid putting pressure on local government finances and will consist of
      • A one-off transition to the localised schemes
      • Potentially provide model schemes, shared data, work with IT providers and provide support and guidance
      • Details on how government will deal with accrued rights will be set out in due course
    • New arrangements may include
      • Personal allowances, premiums, non-dependent deductions, disregards, second adult rebate, taper
      • Payments to pensioners will remain centrally managed and aren’t expected to form part of local schemes

Whatever the ultimate outcome, it is important that local authorities feel that they are able to take a genuinely active role in supporting people back into work, defining what they want from localism and articulating their role in the face to face delivery of Universal Credit.

We will do everything we can to support you and your partners in turning Policy into Practice.

Wishing you a merry Christmas and a Happy New Year.

6 Responses

  1. Nadire Asllani

    What I have red at council information about council tax reductions, it afecct all claimants. In the UC is not inclded dhe council tax benefit. I think it i better for the Government to make one payment to include all tested benefits, IS, JSA, ESA, Housing Benefits and council tax in one benefit, because if you wll leave in the local authorities there will be an complicated situation. If there is a space that somebody  will not pay the council tax to the claimant hi will do it because of the power that has  be given to him. There must be one rule for every claimant acording to everyone circumstances, otherwise there will be a mess up and some claimants will get help with the council tax benefit and some claimant not, it is dependent on the local authorities. Therefore the councill tax benefit mus be included in UC. Thank you.

    • Hello Nadire,
      Thank you for your comment. We would agree, but it doesn’t look likely to happen in the short term. It is up to local councils to design schemes that work with the principles of universal credit, and make claiming as simple as possible.

      • Nadire Asllani

        Thank you for our answer. You said: “It is up to local councils to design schemes………..” That is the problem, which I said before. If you will leave the power to the local councils I am 100% sure that they will not treat everybody in equality rights, if there will be a space to do that. I am saying that from my personal experiences e.g. some people are getting DHP and some people not. It is dependent on the housing benefit officer if he decides or not to approve your case and this will happen with the council tax benefit as well if it is on the power of benefit officer and the vulnerable people will pay the cost.

  2. deven_pip

    The Centre for Social Justice response to the DCLG consultation on the localisation of Council Tax is available here.
    A summary of our response is pasted below, including an overview of the ideal role for local authorities in Universal Credit. 

    Summary CSJ response to the consultation

    The CSJ agrees that localisation has the potential to improve service delivery by giving councils greater influence over the economic future of their area, and by making services more responsive to local needs.  However, the CSJ is concerned that localising council tax benefit is at odds with the wider programme of reforming welfare and the benefit system. 

    Incorporating council tax benefit into the Universal Credit is a simpler and lower cost way for the Government to reform council tax to improve work incentives.  Localising council tax benefit risks complicating the welfare system still further, adding cost and complexity at a time when the wider programme of reform points to simplification to ease the transition into work for claimants.

    The broader aims of the consultation document can be achieved with central payment of council tax benefit within the Universal Credit: 

    • The 10% reduction in support for council tax (£500m) can be incorporated into a centralised system, although the knock on impacts of this would still be felt at local household level; 
    • The administrative cost of reforming council tax could be minimised if incorporated in a wider programme of reform managed by the DWP, reducing administrative cost and complexity;
    • The Universal Credit improves work incentives, simplifies the system and eases the transition into work while increasing take-up by those eligible for in work and out of work support; 
    • Localisation and greater local autonomy can be retained through local authority provision of support for those most in need within their communities.  This could include ad-hoc financial assistance for those families in hardship, but more importantly they could take greater responsibility for tackling the root causes and supporting households through targeted, personalised services and interventions; 
    • This fundamental support could include employability support, help with housing, relationship support, debt advice, addiction recovery or other services that may help the household to escape poverty.  Local authorities we spoke to us told us that they did not need financial incentives to encourage them to improve the lives of their constituents.
  3. deven_pip

     add their voice to the debate, confirming that CTB reform will undermine all of the good bits of Universal Credit.
    A U-turn on this policy would be v welcome…

  4. deven_pip

    The DCLG in their impact assessment failed to consider whether merging council tax support into Universal Credit would have been a better option. 

    The impact assessment is available here:

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