55,000 families facing cuts in benefit support
MORE than 55,000 hard-up households face deep cuts in support to pay their council tax bill.
Under a controversial shake-up of council tax benefit, the government will hand responsibility to local councils – while demanding savings of millions of pounds.
Ministers insist savings are needed, with the bill in greater Bristol topping £77 million last year.
They say the ten per cent target saving is achievable because local authorities will be given more freedom over their spending, including to crack down on second home discounts.
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But the Institute for Fiscal Studies said this would be a "difficult" challenge for councils already facing cuts to their funding.
The government has barred councils from making changes to pensioners' entitlement – meaning working-age claimants face an average reduction of 19 per cent to their payments, the think tank said.
And in areas with higher than average pensioner populations that could rise as high as 33 per cent.
New figures show that in Bristol alone, there are more than 31,000 non-pensioners receiving council tax benefit, which is worth between £16 and £18 a week, and covers up to 90 per cent of a bill.
There are 9,660 in North Somerset, 8,720 in South Gloucestershire and 7,280 in Bath & North East Somerset.
These people would be in the firing line for any reduction in payments.
If councils chose instead to subsidise the benefit using other funds, it would require a 0.4 per cent reduction in spending on local services or a 1.9 per cent hike in council tax, the IFS warned.
In the current system, councils receive a rebate from central government for the amount of council tax they need to subsidise.
From 2013, council tax benefit will effectively be abolished, and councils will be given a set amount in advance, based on previous year's totals and including the cost saving target, to set up their own version.
Parliamentary figures show the bill for the payments reached just under £40 million in Bristol in 2010/11, and a total of £77.7 million across the four local authority areas.
Stuart Adam, of the IFS, said: "Councils have little experience or expertise in designing means-tested support schemes and very little time to do it."
The IFS report, funded by the Joseph Rowntree Foundation, found the funding cut would hit the most deprived areas hardest.
Local Government Association chairman Sir Merrick Cockell said: "Councils are extremely worried about how they're going to protect deserving and vulnerable people from the £500 million cut to council tax benefit next year.
"The cut goes way beyond the money that can be retrieved by cancelling discounts on second homes and empty properties and councils are being put in an impossible position."
Local Government Minister Andrew Stunell said local authorities are to get greater discretion over raising council tax on second homes and empty properties.
He said: "The vast majority of local authorities potentially have a substantial stream of additional income, if they believe they will face difficulties."