At a Cabinet meeting held last month, the Council accepted proposals put forward, and opened up to consultation, for plans which were detailed in a report for how best to adopt the major changes which are being implemented across the country by the Government from April 2013. The report highlights the options available to the Council for tackling what is a real terms cut of 10 per cent in the funding it receives from Government under the present system for Council Tax Benefit.
Under the new system, in place of claimants receiving a benefit towards their Council Tax, the local authority will simply grant a discount to a household’s Council Tax liability.
The Government has stated that all local authorities must ensure that pensioners – who make up around 50 per cent of claimants in County Durham – are fully protected from the changes, and ensure they receive the same level of support as they currently receive under the Council Tax Benefit system.
The cut in Government funding would potentially leave the Council facing a shortfall of around £5.5million. To protect the 64,000 County Durham residents currently in receipt of Council Tax Benefit, the County has chosen to preserve the support available to all who currently qualify for the full amount or partial benefit.
In order to ensure that there is a neutral impact on the 2013/14 Council budget, the County plans a series of cuts to discounts currently available to different categories of empty property, as well as a premium of up to 50 per cent on property that is empty for 2 years or more, and the withdrawal of the discount on second homes. This measure, it is hoped, will not only offset the revenue lost through Government cuts, but will also help to bring empty property back into use faster.
Other options considered, although not adopted, by Durham County Council to fill the funding shortfall was to increase the Council Tax liability for working age claimants by as much as 20 per cent, however, to ensure that people already facing financial hardship are not adversely affected, the Council has chosen not to pass on the cuts to current claimants, which would have left people with less support.
As the new scheme is not tested, and Government funding will be fixed as opposed to adjusting to requirements, as well as being linked to a national average, the Council will keep its policy under review throughout 2013/14.
Brynnen Ririe, the Labour candidate standing in Benfieldside division in the 2013 Councillor elections, said that she is “pleased that Durham County Council is doing what it can locally to try to reduce the impact of the government’s cuts on our older people and vulnerable groups,” however, she was critical of the Government’s plans for increased localisation, adding, “The government is passing this responsibility down to Durham County Council but has only provided 90% of the funding. There is a real worry that the funding cuts will hit our hard-working families already faced with shorter working hours, tax credit cuts and increasing unemployment.”
Earlier this year, Grahame Morris, the MP for Easington, voiced his concerns about the effects of localisation on local authorities like Durham County Council in a Commons debate, stating that “The plans to force local authorities to deliver a localised benefit system will create unfair disparities between council areas and regions.”
The consultation on the Council’s proposal to tackle the transition from Council Tax Benefit to Local Council Tax Support and the reduction in Government funding is open until 26th October, and the Council will make its report on 19th December.