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Why the debate on Council Tax Benefit matters

Posted in BlogBlog | Dec 19, 2012 | By:

money

Today, AMs are making an unscheduled return to the Senedd to debate the regulations for the new regime of support with the costs of Council Tax.  This is a key debate, for a number of reasons.

First, it matters to the 330,000 people in Wales who currently receive Council Tax Benefit.  Almost everyone who currently gets CTB will, from April 2013, have to pay more – some are likely to have to pay Council Tax for the first time.   Many will get a nasty shock when they receive a Council Tax bill in the next few months, not least as it will join the news that many other benefits are being squeezed as well. For people who are, by definition, already on a low income this is a heavy blow.

Second, it matters because of the range of people affected. To date, almost all of the UK Government’s changes to social security benefits have been targeted on people of working age – the so-called shirkers even if many of them are actually workers. But the changes to Council Tax benefit will affect all kinds of people, young and old, single and couples, parents, working people and the unemployed – the changes are indiscrimate.  In the UK as a whole, more than a third of Council Tax benefit claimants are over the age of 65 – one in five are women aged over 65 living alone.  The Welsh Government could have proposed protecting older people, as elsewhere, but the axe then would have fallen all the harder on those under 65.

Third, the changes to Council Tax benefit matter because they risk de-stabilising local government.  Local authorities will now have to collect small sums from thousands of people whose council tax was previously covered by Council Tax benefit.  Whether it’s the 36,280 claimants in Cardiff or the 6,940 claimants in Monmouthshire, there are significant risks that local authorities have difficulty collecting all the council tax due – leaving an unpredictable hole in their budgets right at a time when they are already under pressure.

And last, but by no means least, the Council Tax support regulations matter because they are a test of the Welsh Government’s ability to take on responsibility for a newly-devolved responsibility. Granted, the process of devolving that responsibility has been far from ideal – Mark Drakeford AM described in a paper for the Bevan Foundation that the proposal was a complete surprise and I understand that flows of information about funding for the new benefit have not been smooth either.   Nevertheless, as the Silk Commission begins its enquiry into new powers that the Welsh Government could acquire, its inability to handle the devolution of Council Tax benefit does not bode well.  

This last point has, unfortunately, overshadowed the equally if not more important points about the changes – namely that hundreds of thousands of people in Wales are feeling yet a further turn of the screw on their family finances, for no better reason than they happen to have an already low income. 

 

Victoria Winckler is Director of the Bevan Foundation


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