Jan Luba QC discusses the Government’s plan to abolish council tax benefit and its implications
Although hardly anyone seems to know about it, the Government is about to abolish a scheme that provides nearly £5 billion a year to help the poorest families in the UK cope with their household bills. This note shines a light on a matter which should be at the top of current political debate. It is not – probably because it only concerns the most disadvantaged people in Britain.
Allow me to explain.
Households on modest incomes find that the annual local council tax, payable by homeowners and tenants, is a significant financial burden. At present, the poorest families can qualify for the council tax benefit which – for those at the very bottom of the income ladder – can cover as much as the whole of their council tax bill. The council tax benefit is a national scheme administered under rules set by Parliament and funded by the Treasury.
The Government’s plan is that in April 2013 this nationally funded scheme will be scrapped altogether.
In its place, each of the several hundred local councils in England and Wales will be required to set up their own local schemes for helping the poorest of their council tax payers. Some local schemes will be as generous as the arrangements being cut. But many will not. Councils have competing demands on their own depleted resources and many will not be able to deliver the same level of help. That is no accident. The Government is expecting that the local schemes will mean that over £400m less money is distributed to help the poor meet their council tax bills. An enormous increase in default on payment of council tax can be expected leading to an overall fall in council tax income and ever-harsher enforcement against defaulters.
The change is being made by the Local Government Finance Bill  which is slipping quietly through Parliament and will be law by the end of the year. Shouldn’t this be in the spotlight?
But then again, who cares? It is only the poorest who lose out.
 Town halls must tackle £1bn Council Tax Benefit fraud and error through localisation, DCLG, August 2012
 The change is made by Clause 9. The Bill has its Report stage in the House of Lords on 10 October 2012.