Minggu, 30 September 2012

Council Tax benefit and Cornwall Council's profitable proposal

Council tax benefit is changing across the UK. Responsibility for the scheme has been passed to local authorities along with a cut in the overall amount to fund it. With the Government making it clear that pensioners must be exempt, working age recipients are set to see a big drop in benefit. Crucially though, it looks like Cornwall wants to go further and their proposed scheme will actually be making a profit for the council.

The scale of the cut in the amount Cornwall has received is £6 million. The proposal from the administration is to impose an across the board cut of 30% on the amount that non-pensioner recipients get. And, they have proposed to cut other entitlements which will also save more money. The total amount they will raise? Nearly £8 million - in effect, making a profit out of cutting benefits for some of Cornwall's poorest residents.

Steve Double - the cabinet member in charge of this proposal - told me that he expected the collection rate to fall and to need to raise more than £6 million in cuts as a result. He couldn't put a figure on this collection shortfall - but almost £2 million seems hugely excessive.

Cornwall Council is consulting on a scheme made up like this:

- Across the board 30% cut affecting 26,358 non pensioner households and generating a £7,213,488 saving

- Remove the second adult reduction - 259 households - £55,661 saving
- Cap at Band D - 498 households - £168,424 saving
- No backdating - 782 households - £73,981 saving
- Reduction in capital levels to £6k - 291 households - £220,005 saving
- No underlying entitlement - 303 households - £36,340 saving

It is clear that the government's grant reduction has forced councils to make unpalatable cuts. But why is Cornwall Council going so much further than they need to with their proposed scheme?

Following the consultation period, the Cabinet will make a recommendation in November before a final decision is taken by the full council in December.

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