Council leaders warn poorest will be hit over benefit cuts

More than two million working-age council tax benefit (CTB) claimants face having to pay local taxes to cover a £500m cash cut, the Local Government Association (LGA) has warned.

Under the Government’s CTB rules - contained in the local government finance Bill, which today receives its second reading in the House of Lords - some 2.2 million pensioners and around 1.7 million families with children would be protected from reforms desimged to cut the cost of the benefit.

But LGA analysis of Department for Work and Pensions figures shows nationally some 2,021,510 working age claimants – including the working poor and young unemployed – could end up paying on average £247 more in council tax each year to cover the cash shortfall that will result from ministers plans to localise CTB from next April.

A recent study by the Institute for Fiscal Studies warned that working age claimants face an average 19% cut in support, rising to more than 25% reductions for unprotected beneficiaries across one-in-ten authorities with a high proportion of elderly residents.

Rushcliffe BC chief executive, Allen Graham, last month told The MJ's inaugural Future Forum most authorities would be faced with making real-term CTB savings of between 11% and 14%, greater than the 10% flat cut demanded by ministers. Local government minister, Bob Neill, had earlier told forum delegates there was no 'wriggle room' when it came to implementing the tough requirement to produce a 10% CTB saving when the benefit was localised.

LGA chairman, Sir Merrick Cockell said: ‘The poorest regions and the most vulnerable people will be hardest hit by this cut unless the Government offers councils more flexibility over all forms of council tax discount. It is the only way that councils can ensure that the greatly reduced funding for council tax benefit is targeted at the local people who need it most.’